Trump’s tariffs: Why ISAs can still play an important role in a financial plan

The 2025/26 tax year got off to rather a tumultuous start following President Trump’s ‘Liberation Day’ tariff announcements, but this doesn’t mean that investors should avoid making their annual ISA contributions. ISAs hold a number of tax benefits as they are not subject to income tax and capital gains tax (CGT), and any interest earned on cash held within an ISA is completely tax-free, so investors could consider taking advantage of these benefits. It is, however, important to remember that investments within an ISA carry risk so you could get back less than you contribute.

One option is to remove the timing element from the investment process altogether by adopting a regular investment strategy. Drip feeding your money into an ISA on a regular basis, such as monthly, can be highly beneficial. This method helps to mitigate the emotional aspect of investing, which can often lead to impulsive decisions driven by short-term market fluctuations. Instead of reacting to the current market turmoil, which may only be a temporary blip for long-term investors, regular investing instils a disciplined approach.

Regular investing, also known as pound-cost averaging, involves investing a fixed amount of money at regular intervals. This strategy has several advantages. Firstly, it reduces the risk associated with market timing. By investing consistently, you purchase fewer units when the market is high and more units when the market is low. Over time, this can lead to a lower average cost per unit, potentially enhancing your returns.

Regular investing also helps to smooth out the ups and downs of the market. It ensures that you are continuously contributing to your investment portfolio, regardless of market conditions. This steady approach can be particularly reassuring during periods of volatility, as it prevents you from making hasty decisions based on short-term market movements.

Evelyn Partners can help determine if making regular ISA contributions is a suitable option for you during periods of economic fluctuation. By assessing your individual financial situation and goals, they can provide tailored advice on how to best utilise your ISA allowance to maximise tax benefits and manage risk. We can guide you through the process, offering insights on market trends and help you make informed decisions that align with your risk tolerance and long-term objectives. With our support, you can navigate uncertain times and make the most of your ISA contributions.

There are options available for those who want to take advantage of the tax benefits of ISAs but are nervous when it comes to investing during this period. One is to make the ISA contribution but not invest the money and leave it in cash temporarily. This strategy allows investors to take a step back, assess the market conditions, and make informed decisions about where to allocate your funds. By not rushing into investments, you can align your choices with your risk tolerance and long-term financial goals. However, such periods can occasionally present unique opportunities for investors that have not previously been available and keeping money in cash may not be the most suitable option in the longer term.

Additionally, working with one of our experts can provide invaluable guidance during uncertain times. We can help you navigate market volatility, tailor investment strategies to your individual needs, and ensure that your decisions are well-informed and aligned with your overall financial objectives. Our expertise can offer reassurance and clarity, helping you to make the most of your ISA contributions while managing risk effectively.

While the market turmoil caused by President Trump's tariffs may be unsettling, there are effective strategies to navigate these uncertain times. Whether you choose to temporarily hold cash in your ISA or adopt a regular investment approach, the key is to remain focused on your long-term objectives and avoid making impulsive decisions based on short-term market fluctuations. A disciplined and informed investment strategy can help weather the storm and continue to build your financial future.

If you have any further queries on navigating the current market volatility and making the most of your ISA allowance, speak to your usual Evelyn Partners contact or book an appointment online.