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The Stocks and Shares ISA deadline is 5 April. The tax-efficient investment wrapper is used by millions of Britons each year. If we rewind to the first trading day in 2025 (7 April) and assume an investor put a £10k lump sum in FTSE 100 stocks, how would things currently stand?
Large gains
The start of the ISA year in 2025 coincided with a major shake-up in financial markets due to concerns over US tariffs. As a result, the FTSE 100 opened on 7 April at 7,699 points. A month later, it traded above 8,600 points, marking a sharp recovery as tensions eased.
The market now sits at 10,255 points, up 33.2% in less than a year. That’s a pretty remarkable statistic and one which would mean the investor would be sitting on an unrealised gain of £3320. However, this is well above the historical rate of return. If the person had decided to put the £10k in the ISA just a month later, the return would have been 19.2%.
The return assumes funds were put in an index tracker. In reality, more active stock selection could have been used, which would have led to even greater profit variability. For example, having a large allocation to Fresnillo would have generated a 280% gain. On the other hand, any big weighting to Autotrader would have lost 34%.
The year ahead
The ISA deadline for 2026 is now less than a month away. As a result, it makes sense to start to look for opportunities. Of course, if an investor has free money now and has only used £10k of the current allowance, there’s room to buy now as the limit is £20k. But if someone has already maxed this out, they’d need to wait for April.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
One stock I like is NatWest Group (LSE:NWG). The stock’s been caught up in the recent broader market sell-off, but I don’t think the company is exposed to the situation in the Middle East. Therefore, this could be a short-term dip rather than anything more serious.
In fact, if energy prices remain elevated, it could push UK inflation higher and prompt the Bank of England to actually raise interest rates. This would boost NatWest’s net interest margin, potentially increasing profits later in the year.
Even without this factor, the outlook for the coming year looks bright. Last month, it announced it was acquiring wealth manager Evelyn Partners. This is its biggest deal in decades and shows a clear push to expand more into this space. Wealth management businesses typically have higher margins and steadier income.
However, risks remain. Fintech Revolut just got a UK banking license, highlighting how competition’s stepping up and looking to take market share from more traditional firms like NatWest Group. Even with this, I think it could be a stock to consider for an ISA in the coming year.
