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Mar 2020

Coronavirus: Stock Markets are Down, so Should I Avoid Investment ISAs?

Coronavirus: Stock Markets are Down, so Should I Avoid Investment ISAs?

The Stock Market’s numbers have been turbulent due to the Covid-19 pandemic causing economic uncertainty, but don’t put off using your ISA investment allowance for this tax year. We've broken down the four reasons why you should still be getting opening Investment ISAs, despite the downturn. 

With the end of this tax year rapidly approaching (at point of writing, there are only three weeks left!), this is a time when we usually see many people opening their last-minute investment ISAs to use their ISA allowance.

If our website stats are anything to go by, you aren’t alone if this is you - as we usually see a spike in March/April of people frantically searching terms like “am I too late to open an ISA?” and “how do I open an Investment ISA?”.

But considering the events of the past week – the rapid spreading of Coronavirus through the UK population, and the resulting injection of considerable economic uncertainty causing stock markets to tumble – you might be thinking: should I avoid putting my cash into an Investment ISA until the markets stabilize?

The short answer is: no, don’t let this fluctuation put you off!

It makes complete sense why you might instinctively want to avoid investing – you’ve worked hard for your money, and with all the doom and gloom in the media it seems the sensible thing to protect it from a falling stock market.

But we’ve put together our top four reasons why you should still open your investment ISAs:

1.A Blip in the Market is normal

  • The Market having big swings has precedence. When you invest your money in an ISA, there is a risk associated – the market goes down as well as up, sometimes dramatically, and this means you can end up with less money than you originally started with. The rates will generally level out and return to normal, to selling your investments now or not continuing with plans is ill-advised.

2.With Investments, Long Term is your Friend

  • Investments should never be a knee-jerk reaction. If you have a long-term plan for your investments, you should stick to these to make sure your investments can weather the changes in the stock market. The general rule of thumb is that you should try and keep your investments for eat least five years.

3.Use it or Lose it

  • Your allowance will not carry over into the next tax year, so it’s very much a case of use it or lose it. For this year (2019/2020) you have £20,000 worth of tax-free savings allowance which you can invest but this will expire on April 6th – when the next tax year begins. The next tax year’s allowance has remained the same, at £20,000.

4.Buy Low, Sell High

  • Buying in when the markets are low will mean bigger returns when the market swings back up. So if you buy shares now through a Stocks and Shares ISA, you could potentially see big returns when the market swing back up and returns to normal.

I'm really unsure about opening a Stocks and Shares ISA. What are my other other choices? 

If you are very, very risk averse, you can still make the most of your ISA allowance for 2019/2020. Your other options include: 

Read more about Stocks and Shares ISAs. 

Selected ISAs

Stocks & Shares ISA

from Moneyfarm

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Choose your risk profile and have it matched to an investment portfolio expertly built and managed
  • Invest From: £1,500

Why we like it: Answer questions about your goals, financial situation and attitude to risk, and Moneyfarm will recommend the right ISA portfolio for you, built and managed by experts to help your money grow. You’ll always be invested in a portfolio that’s suitable for you, and you can manage this through the Advice Centre. See what you’re invested in, how you’re performing and how much you’re paying anywhere and any time with the Moneyfarm app. Add money to your ISA by setting up a direct debit, investing a lump-sum, or by transferring old ISAs for free

Stocks & Shares ISA

from Wealthify

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Choose your risk profile and have an investment Plan built and managed for you
  • Invest From: No minimum

Why we like it: Choose your level of risk from cautious to adventurous and have a plan expertly created and managed for you. Create multiple plans with different risk levels, Ethical plans also available. Invest as little or much as you like, add regular payments and top up whenever you like. Withdraw money or transfer out without notice or penalty fees. Wealthify app lets you check how your Plan is performing, manage your transactions and provide investment news and insights. Simple annual management charge of 0.6%

Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice.

High Income ISAs

High income ISA ideas:

ISAs Products

Cash ISAs

Fixed Rate & Instant Access ISAs:

Cash ISAs: 

Stocks & Shares ISAs

Types of Stocks and Shares ISA include: 

Stocks and Shares ISAs

Latest News

5 Considerations for Your Next Investment ISA

15th March 2021

You've decided to invest your savings into a Stocks and Shares ISA. You'll be using your tax-free ISA allowance for this year before the deadline, while also investing your money for your future. But what do you need to consider before opening an account? We've put together a list of our top five considerations for you to think about before you click "apply". 

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