Melanie Bien: Waiting till the midnight hour?

With just under three weeks left until the end of the tax year we are right in the middle of what has become called the ISA season. But while sales of equity individual savings accounts have, understandably, suffered over the past two years, this season things are eerily quiet.

With just under three weeks left until the end of the tax year we are right in the middle of what has become called the ISA season. But while sales of equity individual savings accounts have, understandably, suffered over the past two years, this season things are eerily quiet.

According to Find.co.uk, a financial website, interest in equity ISAs has all but completely collapsed. Even though we will lose our personal allowance if we don't use it by 5 April – £7,000 per person can be invested in ISAs each tax year – it seems that the fear of throwing good money after bad is holding us back.

If you take January and February together, equity ISA traffic is down 80 per cent on this time last year. These Find.co.uk figures only reflect internet use, but they give a strong indication of the market as a whole.

Unsurprisingly, cash ISA traffic has increased – by 23 per cent – showing that people are investing more cautiously. But as a whole, ISA traffic is down 33 per cent, so a lot of people are missing out on a welcome tax break.

It could be that everyone is waiting till the midnight hour before taking the plunge, in case the market falls still further. But while last-minute rushes have been a feature of previous ISA seasons, that seems unlikely to be repeated this year. With war looming and the stock markets already in the doldrums, there seems little evidence of an upturn in equities any time soon. This could be a buying opportunity, as financial advisers never tire of telling us, but who wants to take that gamble and risk losing even more money?

It is a shame to miss an opportunity to shelter savings from the taxman, though, so it is worth considering whether you can invest your cash with the minimum amount of risk.

If you are saving for the short term, equities are not the answer. Instead you should opt for the highest- paying mini cash ISA you can find. Each person can invest up to £3,000 per annum in a cash ISA: Safeway is paying 4.2 per cent interest at the moment.

If you are saving for the longer term, think about equities. Diversification is a good idea and using a fund supermarket like Fidelity's FundsNetwork (www.fidelity.co.uk/fundsnetwork), is not only cheap, easy and efficient, it allows you to spread your exposure.

A self-select ISA is another option as it allows you to pick and choose what funds and shares you want. There is no need to rush your decision either: you can put cash in your self-select ISA up to the allowed amount now, and then make your investment decisions later.

m.bien@independent.co.uk