Don't ignore idle cash, invest now for long-term growth

If you have spare cash lying idle in your bank account and were thinking about investing in shares or funds, don't wait until the end of the tax year to put the money to work.

History suggests that the longer your money is invested, the greater the potential returns. So get a head start by investing now rather than leaving it until the end of the current tax year on 5 April 2016.

Daisy puts £10,000 in her ISA on 6 April 2015 at the start of the new tax year. George forgets to invest his £10,000 and only remembers to use his Stocks & Shares ISA on 5 April 2016, just in time to beat the tax year deadline.

Over the past 10 years, the UK stock market has grown by an average of 5.5% p.a. in value¹. Let's assume both Daisy and George's ISA grow at the same rate each year and incur annual charges of 1% per year.

Daisy's ISA will gradually be worth more than George's investments as she started putting her money to work earlier. Over time, the gap will be very significant.

• After 5 years, Daisy's ISA is worth £12,461 versus George's ISA at £11,925, because she's had an extra year invested in the stock market.
• Ten years on, Daisy's ISA is valued at £15,529 whereas George's investments are worth £14,860.
• After 15 years, Daisy's ISA is worth £19,352 versus George's ISA at £18,519. That means Daisy has made an extra £833 by being proactive and not letting her cash sit idle.

¹Source: Credit Suisse Global Investment Returns Yearbook 2015

Data Source: assuming 5.5% annual return and 1% annual fees http://moneyfacts.co.uk/compare/savings/lump-sum-investment/

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