A new tax year means new tax-free allowances, making it an ideal time to do some financial planning to set you up for any potential bill increases (which, sadly, are also part of the deal).
And with your refreshed ISA Allowance giving you the opportunity to save and/or invest without being taxed on you’re the gains you make, you’ll probably want to consider how to maximise your ISA over the next twelve months (or ISAs if you already have a few under your belt).
This is particularly key if you have a Stocks and Shares ISA, with there being a few things that can impact your profits.
So, whether you’re already investing through one or are ready to take the leap, here are some easy and smart ways to boost your ISA returns (that you don’t need to be a financial expert to pull off).
Just FYI: don’t forget that the tax treatment of ISAs is dependent on your individual circumstances, and could be subject to change in the future.
- Start investing early in the tax year
- Utilise your ISA Allowance
- Review your current ISAs
- Diversify your portfolio
- Review how much you contribute
- Maximise for couples
- Investing for the long term
Start investing early in the tax year
Albert Einstein supposedly said that compound interest is the ‘eighth wonder of the world’.
Whether this is true or not, you can’t deny its power when aiming to boost any profits you make in a savings or investment account.
Here’s a rundown of how it works using a Stocks and Shares ISA:
- When you pay money into the account, it will be invested in assets like stocks and bonds, and you’ll earn a profit if their value increases.
- These profits will be paid into your investment account and if you leave them there, they’ll also be invested in the stock market — and able to generate their own profits.
This means you could make gains from your original deposit, the profits you earn, and any additional money you decide to pay into the account later.
Generally, the longer you invest, the more time you’ll have to make potential profits, and for those profits to generate their own gains, too.
And with your brand-new ISA Allowance on 6th April each year, it makes sense to use it sooner rather than later if you want to maximise your ISA.
However, do keep in mind that compounding relies on your investments going up in value. And as the performance of financial markets can fluctuate, you could end up with less than you invested if you sell them while they’re at a loss.
Utilise your ISA Allowance
We’ve already mentioned your ISA Allowance a few times, so here’s a little refresher on how much this gives you to save and/or invest tax-free.
The ISA Allowance for 2025/26 is £20,000, and the UK Government[1] has confirmed it’ll be frozen at this amount until 2030 (though it could change after this).
Remember, you can deposit up to this amount in one ISA (though payments into Lifetime ISAs are currently capped at £4,000 per tax year) or spread it across the various ones you have — including multiple Stocks and Shares ISAs.
Just FYI, these are also called ‘Investment ISAs’ by some providers. And if you were interested in the other types of ISAs you can have alongside these, they are:
- Cash ISAs (which we also offer)
- Innovative Finance ISAs
- Lifetime ISAs (also called ‘LISAs’)
And because anything you gain in an ISA is tax-free, it’s worth taking advantage of them if you are planning to invest — especially as you can’t carry any unused allowance over into the next tax year.
As they say: use or lose it!
Review your ISA performance and provider
Because you’ll have just been handed a new ISA Allowance to use, the start of the tax year could be a good time to review your Stocks and Shares ISA to make sure it’s still a good fit for you.
After all, there are a lot of Stocks and Shares ISA providers out there with different fees and benefits; if you think another will be a better match, then you could transfer your ISA to a new one.
However, check if you’ll be charged to do this first; because, although we won’t hit you with any fees to move an ISA to or from us, other providers might.
Here are some things to consider if you want to maximise your ISA and potential profits:
- Are you limited by your expertise? If you’re choosing your investments yourself but don’t know if you’re making the best decisions, you could switch to a company that takes care of them for you (like us!). At Wealthify, for example, we keep an eye on the markets and manage your portfolio.
- Are you taking the right level of risk? Some investments carry more risk than others, and this can change depending on what’s happening in the markets. If you invest with us, then it may be worth seeing if you can reduce your Investment Plan’s risk level to help minimise performance fluctuations.
- Are you still happy with your fees? Have your provider’s fees increased for this tax year? These can eat into your profits, so even if they haven’t, it’s worth seeing how your fees (and what you’re getting for them) compare to other ISAs on the market.
- Are there other benefits you want? While all ISAs shield your returns from tax, some will limit withdrawals and have other benefits, like being a flexible ISA. This is the case with ours, meaning you can withdraw and pay the same amount of money back in during the tax year without using any more of your ISA Allowance.
Beat the capital gains tax increase
When it comes to tax on investments, a key one to be aware of is Capital Gains Tax (CGT). CGT is basically what you pay on any profit you make from selling, gifting, swapping or transferring the ownership of an asset that has increased in value (like stocks or shares).
But what is the Capital Gains tax allowance for 2025/26? Currently, you can earn up to £3,000 (or £1,500 for trusts) from the above without having to pay this tax.
And in terms of how much tax you’ll pay, it was announced in the 2024 Autumn Budget that rates would be increasing. So, here’s how they currently stand for assets like investments:
There is some good news though: if you invest through an ISA, you can beat the Capital Gains Tax increase as you won’t have to pay any tax on the profits you make from selling assets.
But again, do keep in mind that the tax treatment of ISAs depend on personal circumstances, and this could be subject to change in the future.
Diversify your portfolio
People love to say not to put all your eggs in one basket — us included!
When you invest, it can be tempting to buy stocks from a few companies. This does mean, however, that you’re relying on only them to make you a profit (and they might not). Markets naturally go down and up, with different asset types and companies performing well at different times.
But if you were to diversify your investments, you could spread your risk — and potentially minimise it.
This means putting your money into different assets, like company stocks, government bonds, commodities, and property, as well as various sectors and regions.
Just think of the volatility investors experienced in the first quarter of 2025. We saw global stock markets drop, and equities (which is essentially another word for a ‘stock’ or ‘share’) struggled.
However, also holding bonds in your portfolio (and not just equities) could have helped protect your portfolio during this dip[2].
Luckily, diversifying your investments to maximise your ISA is probably simpler than you think. One way is to do this is by choosing funds, which are like ‘hampers’ full of different investments.
If you use a Wealthify Stocks and Shares ISA to invest, our experts will put your money in funds to help keep your costs low, as well as ensure your investments are diversified.
But they won’t just build your Investment Plan: they’ll also manage it for you. This means keeping an eye on what’s happening in the markets, so they can make changes to what you’re invested in to help keep your performance on track.
Review your contributions
Another easy way to maximise your ISA’s potential could be by upping your contributions.
Even if it’s only by a small amount each month (or just when you can afford to), the more investments you hold, the more chance you could have of making a gain and protecting your money from inflation.
This is an important concept to understand, as inflation eats away at your money over time if it’s not earning any interest at all, or if the interest it’s gaining in a Cash ISA or other type of savings account that offers an interest rate that’s lower than the level of inflation.
With your new ISA Allowance waiting to be used, the start of the new tax year could be a good time to review how much you paid into any ISAs you already have over the last 12 months. It also gives you the opportunity to assess whether you could afford to increase your ISA contributions going forward — especially if you’ve had a pay rise or get regular bonuses from your employer.
And if you can, setting up monthly payments into your Stocks and Shares ISA will allow you to take advantage of something called pound cost averaging (or drip-feeding).
By paying in little and often, you’ll be buying investments regularly, rather than trying to figure out the ‘best’ time to pick them up. This means sometimes you’ll buy high, and sometimes you’ll buy low; the idea, however, is that over time, the costs of these will average out.
Because you won’t be trying to ‘time the market’, doing this can help you to stay calm during dips and make investing a habit, too.
Maximise for couples
If you’re part of a couple and are planning to max out your entire £20,000 ISA Allowance this year, another smart way to boost your ISA returns could be to ensure your partner is making the most of theirs, too.
Even if you’re married, you’ll both get your own allowance to use during the tax year. And like we’ve said before, it’s a case of ‘use it or lose it’, as you can’t carry it over into the next one.
Although you can’t open a joint ISA together, you could effectively double your ISA Allowance by using both of yours in the same tax year — meaning you’ll actually have £40,000 to save and/or invest tax-free.
Investing for the long term
When it comes to investing, something you’ll hear time and time again is that it’s your time in the market that’s key — not timing the market.
In theory, you want to buy investments while they’re cheap so they can go up in value. But in reality, market performance can change quickly, so it’s impossible to predict when it will be up or down.
Despite past performance not being an indicator of future results, history does show that staying invested for a longer timeframe could give your investments a better chance to recover from dips and maximise your ISA returns. This is why it’s generally recommended to invest for at least five years, making sure you don’t deposit money you’re likely to need in the near future.
For example, here’s what your chance of making a return could have looked like if you invested in the FTSE 100[3] from 1st January 1986:
If you’re not making the most of your annual ISA Allowance by investing little-and-often for the long term, you may be limiting your potential profits.
And if you do want to maximise your ISA Allowance this year, why not consider a Wealthify Stocks and Shares ISA?
As well as having a fully diversified portfolio that aligns with your attitude to risk, you’ll also have the peace of mind knowing your money is being managed by a team of experts, for a low fee. Plus, you can pay in and withdraw whenever it suits you!
Please remember the value of your investments can go down as well as up, and you could get back less than invested.
Your tax treatment will depend on your individual circumstances, and it may be subject to change in the future.
Wealthify does not provide financial advice. Please seek financial advice if you are unsure about investing.
References
1. https://www.moneyhelper.org.uk/en/blog/savings/understanding-the-new-ISA-rules
2. https://www.wealthify.com/blog/month-in-the-markets-march-2025
3. Data from Bloomberg (sourced on 10th April 2025)
