The answer to the aforementioned headache is that most fund managers offer a “cash reserve” facility where you can park this year’s ISA allowance until you wish/decide to invest it in the market. You could even drip feed it into shares later on as opposed to investing the lot as one lump sum.
The one downside is that the interest rate paid on these Cash Reserves is currently as low as 0.1%. But on the plus side when it comes to eventually entering the investment markets you will likely only have to pay a switching fee (Fidelity charge just 0.25%) but no initial charge from the new fund manager.
So depending on your fund choice you could save as much as 4% on your initial investment particularly if you use a discount broker, such as Bestinvest, who has waived their right to any initial commission. (who instead will take a kick back on fund manager's annual management charge)
The NET result is that you can secure the use of your annual Stocks and Shares ISA allowance and save £100's in the long run.
KERRRCHING!!!
£200 Pension Cashback Offer
Make a qualifying deposit or transfer a pension to our partner Interactive Investor.
- Deposit or transfer a pension of at least £20k and you could earn £200 cashback
- Terms and Fees apply, Capital at risk
- New & Existing customers opening a SIPP
- Offer ends 30th June 2026
Before starting your transfer, check you won't lose any valuable benefits (such as guaranteed annuity rates or a lower protected pension age) and find out what exit fees you might have to pay
