Volatility has picked up, geopolitical tensions remain elevated, and the memory of recent market swings is still fresh enough to make even experienced investors pause but Cameron Rueppel, Wealth Management Consultant at Mattioli Woods says that waiting to use ISA allowances could be an expensive decision.
Every April, the same conversation plays out across adviser offices and financial planning desks around the country.
Markets are uncertain, clients are hesitant and a perfectly usable £20,000 ISA allowance risks being left on the table – not through poor planning, but through paralysis.
This year, that hesitation feels more pronounced. Volatility has picked up, geopolitical tensions remain elevated, and the memory of recent market swings is still fresh enough to make even experienced investors pause.
The instinct to wait for clearer conditions is understandable; it’s also, historically, expensive.
The cost of waiting is not abstract
The impact of delay is often underestimated because it’s not immediately visible. But over time, it becomes significant.
Consider a simple example. Investing £5,000 a year from age 25, growing at 5% annually, results in a pot of around £639,000 by age 65.
Delay that start by a decade – investing the same amount at the same rate – and the outcome falls to approximately £354,000. The shortfall is £285,000, despite only £50,000 less being invested1.
Compounding is powerful, but it’s also unforgiving of hesitation, and unlike many financial decisions, an ISA allowance not used within the tax year is lost permanently.
Volatility is a feature, not a flaw
Periods of market turbulence can feel like a signal to step back. In reality, they’re a normal part of investing.
Since 1986, global equity markets have experienced average intra-year declines of 14.6%, yet still delivered positive calendar-year returns in the majority of years2.
Falls of 10% or more within a single year are not unusual; they’re a structural feature of equity investing.
What matters more is how investors respond. Data consistently shows that outflows from investment funds tend to occur when markets are already near their lows, investors selling into weakness, locking in losses, and often missing the subsequent recovery.
Following major geopolitical and economic shocks since 1990, diversified portfolios of equities and bonds have outperformed cash more than 70% of the time over one year, and in every instance over three years3. The long-term advantage of staying invested is clear.
Cash is not always the safest long-term option
Cash ISAs have regained popularity in a higher-rate environment, and for good reason. They offer stability and certainty, particularly for short-term needs.
However, over longer periods, the picture is less favourable. Since 1900, UK equities have delivered real (inflation-adjusted) returns of around 5.1% annually, compared with just 0.6% for cash.
More recently, since 2000, cash has delivered a negative real return of approximately -1.0% per year, while equities have remained positive despite significant market shocks4.
The headline rate on cash may appear attractive, but the more important question is whether it can maintain purchasing power over a ten- or twenty-year horizon. Historically, it has struggled to do so.
How to approach ISA investing in uncertain markets
None of this is an argument against holding cash. It has an important role within a broader financial plan, particularly for liquidity and short-term security.
But for long-term savings, the stronger case is typically for a well-diversified investment portfolio held within the ISA wrapper. This allows investors to take full advantage of the tax-free environment for growth over time.
For those concerned about committing a lump sum in volatile conditions, phasing investments through regular monthly contributions can be an effective strategy.
It reduces the risk of poor timing while maintaining exposure to the market. A diversified multi-asset approach has historically delivered attractive returns over the past decade, while smoothing some of the volatility associated with equities alone.
Ultimately, the ISA itself is simply the wrapper, it’s the underlying investment strategy that determines outcomes.
The role of advice
ISA season is often seen as an administrative deadline. In practice, it’s a behavioural one.
The role of an adviser is not simply to facilitate the use of an allowance, but to provide context and discipline at precisely the moments when inaction feels most comfortable.
Because the greatest risk to long-term wealth is rarely market volatility; it’s the decision to wait for a moment that never quite arrives.
1 2 3 4 Source: J.P. Morgan Asset Management Guide to the Markets – UK, 2026 Edition (produced with Mattioli Woods). Data as at 31 December 2025. For illustrative purposes only. Past performance is not a reliable indicator of future results.
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The writer’s views are their own and do not constitute financial advice.
This information should not be relied upon by retail clients or investment professionals. Reference to any particular investment does not constitute a recommendation to buy or sell the investment.
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