Interactive Investor has urged investors not to miss out on their ISA allowance for the current tax year.

Despite market volatility, investors should still consider securing their allowance with the option of waiting until a less volatile time before investing in funds, stocks or shares.

Rebecca O’Keefe, head of fund management at Interactive Investor, says, ‘What is most important is that you should not miss the opportunity to use your ISA allowance. If you do not want to invest right now in the equity market you should still take advantage of your £7,000 allowance.

‘You can either leave it in cash within the account or invest in a cash fund that will act as a safe haven for the short term. This will then allow you to invest it later in the year at a time when you are happier with the market prospects.’

According to Interactive Investor, there are steps investors can take to limit their risk: ‘Ideally you should have at least a five-year horizon, which will hopefully allow you to ride out any possible short-term market dips,’ says O’Keefe. ‘You can invest regularly, which will have the benefits of minimising the risk of market timing. You can also diversify your investment by buying funds within your ISA rather than individual shares.

‘As important is the need to look beyond the headline numbers and check for any possible hidden costs, in particular ISA administration and inactivity fees. With charges ranging from £0 to £235 per annum for ISA fees and additional costs if you are not regularly trading, these fees can make an enormous difference to your return.’