The best money to contribute to your SIPP or ISA before the tax year ends

The deadline for last-minute SIPP or ISA investors to use up their annual allowances is April 5

What are the best funds, according to experts?

One of the best ways to protect your investment income and capital gains from the taxman is to invest in an ISA or self-invested personal pension (SIPP). These wrappers are now more valuable than ever because dividend and capital gains allowances have been drastically reduced in recent years.

With thousands of funds, ETFs, and trusts available, it can be difficult to decide which stocks or funds are worthwhile to include in your portfolio.

You can find the best funds by using the best-buy lists published by a number of investment platforms, regardless of whether you're looking for an ISA, SIPP, or another type of investment account. These are practical resources that can greatly streamline your research process.

"Choosing the right mix of investments that are in line with their attitude to risk can be a daunting task for investors who want to make their investment portfolios as tax-efficient as possible in the run-up to the tax year end, especially if they are trying to make their decisions quickly," says Jason Hollands, managing director at investment platform Bestinvest.

That's where the Best Funds List can help, as it provides do-it-yourself investors with a quick overview of the best funds, trusts, and exchange-traded funds (ETFs) in each of the primary industries selected by our research teams, along with a variety of options that incorporate ESG strategies.

Research teams usually meet with fund managers, examine the market environment, and study the performance, risk-management strategy, and investment process of funds.

Bestinvest's most recent list of the best funds, which was released on March 31, includes some of the best funds to take into consideration. To find out which funds to stay away from, you can also read the most recent Spot the Dog report.

Top funds to think about.

Below are 19 funds from the best-buy list, arranged by asset class and region. The online report contains Bestinvests' complete list. The report also provides a summary of the fees and investment strategies of each of the funds listed below.

Stocks in the United Kingdom.

Fixed income from Artemis UK Select Temple Bar Investment Trust Special Situations BlackRock UK Income Fidelity.

UCITS ETF MI TwentyFour Dynamic Bond Europe, iShares Core UK Gilts.

LionTrust European Dynamic Japan, a subsidiary of Fidelity European Trust.

Asia & EM MandG Japan JPMorgan Japanese Investment Trust.

Schroder Asian Total Return Investment Company, North America; Templeton Emerging Markets Investment Trust.

GQG Partners US Equity Global; Premier Miton US Opportunities; Xtrackers S&P 500 Equal Weight UCITS ETF.

Loomis Sayles Global Growth Equity Real Assets Fidelity Index World.

Invesco Physical Infrastructure for Gold ETC GBX 3i.

Money fell off the list of best-buys.

The funds listed below were on the September 2024 best-buy list but have since been removed.

Octopus Renewables Infrastructure Trust Renewables Infrastructure Group M&G Positive Impact Ninety One Global Environment Liontrust UK Growth WS Lindsell Train UK Equity FSSA Asia Focus Barings Europe Select Trust Baillie Gifford Global Discovery TM Redwheel Global Emerging Markets Fidelity Index Japan Jupiter Japan Income iShares Core MSCI Japan IMI ETF.

There are now new best-buy funds.

The list has been updated to include these newcomers since the previous edition.

Vanguard Global Small-Cap Index, Goldman Sachs Sterling Liquid Reserves, iShares, MSCI World Energy Sector ETF, JPM UK Equity Core ETF, Xtrackers, MSCI World Financials, MSCI World Communication Services, MSCI World Momentum, and MSCI World Quality ETF, Aberforth Smaller Companies Trust.

Important factors to think about when looking into funds.

A best-buy guide can be a helpful resource for researching funds, but it doesn't cover all the information you require. DIY investors should carefully consider their goals and asset allocation before choosing which funds to invest in.

How much risk are you willing and able to take? What blend of assets can help you reach your goals of income or growth?

The best-buy guide is useful once you have a solid plan in place.

You might be better off choosing a managed ISA or SIPP, where an investment professional chooses funds on your behalf based on a predetermined risk profile, if you're unsure and lack experience with do-it-yourself investing.

On the other hand, you might profit from investment guidance. Although it can be costly, this is frequently a wise choice for investors who have sizable assets. Those with smaller pots or more straightforward affairs may find that using a robo-advisor is less expensive than speaking with a human advisor.

Whatever you do, don't make a snap decision about investments at five minutes before midnight on April 5; you still have time to use your allowances without making a hasty choice you might later come to regret.

Sarah Coles, head of personal finance at investment platform Hargreaves Lansdown, says that if you're in a hurry to open an ISA, now isn't necessarily the best time to be carefully considering your longer-term investment strategy.

"You can deposit cash into a stocks and shares ISA before the deadline passes, and you can move into your selected investments when you're ready to maximize your money," she continues.

A pension and an ISA: how much can you contribute?

The ISA allowance is £20,000 per year. All of this can be kept in a single account or distributed among several different pots, such as cash ISAs, stocks and shares ISAs, and even a lifetime ISA (which has slightly different rules and a lower allowance of 4,000).

The way pensions operate is a little different. You are only eligible for tax relief on up to 100% of your earnings or £60,000, whichever is less, for the amount you contribute to your pension pots each tax year.

In essence, pension tax relief is a refund you receive for your pension contributions, in which HMRC "refunds" the income tax you would have paid on the funds at the time of their creation. For instance, if you pay 80 to your pension as a basic-rate taxpayer, HMRC will increase the amount to 100.

A lower annual pension allowance is given to some people, such as those who have already used their pension pot or who make more than £260,000 in "adjusted income" (total income plus the amount your employer contributes to your pension).

Only those who have already used their pension and activated the "money purchase annual allowance" are eligible for tax breaks on contributions up to £10,000. High earners, on the other hand, forfeit one allowance for every two adjusted incomes over £260,000.

The regulations are complicated, as they always are, but one benefit is that you can frequently carry forward any unused pension benefits from the previous three tax years. Your income will still need to be higher than (or equal to) the amount you want to pay into your pension.

If you are able, it is worthwhile to utilize your tax-free allowances. Any capital gains or investment income received in an SIPP or ISA is tax-free, and pensions provide a useful boost as you enter the system.