From today the ISA allowance goes up from £7,200 to £10,200; make the most of it and invest sooner rather than later, says Fair Investment Company

-51% plan to make lump sum ISA investment at start of season
-Invest £10,200 now and you could earn up to £714 this year
-Invest £5,100 now and earn £204 this year

A recent Fair Investment survey revealed that more than half of investors (51%) make a lump sum ISA investment at the start of the season, with 37% already pledging to use their full £10,200 allowance this year, and Fair Investment Company is urging other investors to follow their example.

“Our survey reveals that more than half of our investors make a lump sum ISA investment at the beginning of the season, which is the most efficient way to use your ISA allowance,” explains Rebecca Sargent, savings and investments at Fair Investment Company.

“By making a lump sum investment at the start of the year you have the entire tax year in which to earn a return on that cash. For example, if you were to invest your full £10,200 allowance today into a market leading stocks and shares ISA like the Schroders Income Maximiser ISA (a fund that aims to deliver a target income yield of 7% a year) by the end of the year you could get a potential return of £714*, and any tax on this is waived using an ISA wrapper.”

The survey also revealed that 32% of people invest just their cash allowance, (which is now £5,100 for everyone) with 14% per cent planning to invest just their cash allowance again in the 2010/11 tax year.

“For those who are only happy investing in a cash ISA, it is also beneficial to invest the allowance at the start of the season in order to gain maximum advantage,” says Rebecca.

For example, if a saver were to invest the full £5,100 into a market leading fixed rate cash ISA like the RBS Royal Deposit (fixed at 4% for 3 years) in the first year, they would earn £204 in interest.

And for those who want instant access to their cash – investing the full cash allowance into something like the Natwest E-cash ISA (currently paying 2.50%) would still earn £127.50 in a year.

“If you can, it is worth investing your full ISA allowance, or as much as you can, now, because the longer you leave it, the less you’ll earn,” says Rebecca.

“Take advantage of the new limits and use them to their full potential.”