ISA investing: nine ii experts reveal their ISA tips for 2026-27

At the start of the new tax year, many investors prefer to get their money to work in a tax-free wrapper straightaway.

However, deciding where to invest is not always easy, so we asked interactive investor’s team of experts how they’re thinking of using their tax allowance in 2026-27.

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Lee Wild, Head of Editorial

I like to use both individual stocks and collective investments in my ISA and pension, diversifying across both geographies, themes and sectors. I still think tech will prevail, so have a regular investment to cover that off. But I do like a good dividend stock, and after picking Legal & General Group (LSE:LGEN) as my tip of the year in December, I’m now backing M&G Ordinary Shares (LSE:MNG) to deliver inflation-busting income this tax year.

Last month’s annual results didn’t set off any fireworks but largely met expectations. A dip in the share price a week later is largely explained by the ex-dividend date which means the next dividend will be the interim payout, which will likely go ex in September. Last year, M&G paid 6.7p followed by a 13.8p final dividend. That total is expected to nudge up to around 21p in 2026 giving a yield of 7.4%. A lot has been spoken about paper-thin dividend cover and whether the payout is sustainable, but in the annual results management consistently referred to “attractive, dependable dividends” and a “progressive and sustainable dividend policy”. I believe them.

In terms of the share price, for me this is a long-term income play, so it’s not a priority, but having broken above the significant 250p level last year, that should now provide strong support should markets backfire again. 

Craig Rickman, Personal Finance Editor

I recently paused my regular stocks & shares ISA contributions to free-up some extra disposable income to fund a home move. As the transaction completed a couple of weeks ago, I can resume monthly payments which dovetails nicely with the start of the 2026-27 tax year. I’m also in the process of transferring surplus cash ISA holdings to the stocks and shares type to help boost returns and admittedly stop me from spending it on stuff I don’t need.

My stocks and shares ISA is divided into two buckets, each serving a specific goal: I plan to access the first in the next seven or eight years, while the second has a much longer time frame – essentially a retirement pot to supplement my pension savings.

Due to the medium-term nature of bucket one, I want to avoid taking big risks but equally need the money to grow. Although I considered complementing equities with bonds and perhaps commodities, I’ll keep faith with the Vanguard LifeStrategy 100% Equity A Acc fund. I may reduce risk as my goal draws closer to avoid a market slump messing up my plans.

For the second bucket, the time horizon could be 20 to 25 years so I can plump for something a bit racier. To complement my core holding (as above), I’ve opted for M&G Emerging Marketsfund and Artemis UK Smaller Companies I Acc fund.

Richard Hunter, Head of Markets

It remains to be seen whether concerns overhanging the sector as a whole are cyclical or societal. There is some evidence of customers trading down to cheaper alternatives, which provides an immediate headwind to Diageo (LSE:DGE)’s premiumisation aspirations. Meanwhile, there is some debate as to whether the younger consumer market is a growth area at all given changing attitudes, although the growing proliferation of the “moderation”, low to no-alcohol drinks could provide an opportunity.

Diageo is cutting its cloth accordingly and disposing of non-strategic and non-core assets. Meanwhile, the jewel in the crown remains the Guinness brand. Apparently exempt from the concerns seen elsewhere by geography, habits or price, sales grew 12% last year, with double-digit hikes established for the fifth consecutive year. Guinness also gained share in its three largest markets, while a no-alcohol version has opened up a new potential area of growth. It is therefore of little surprise that the group was quick to quash any rumours that the brand was being spun off.

Diageo remains a behemoth, with 13 billion-dollar brands stretching across 180 geographies, even if developments over the last year have taken the sheen from a stock traditionally regarded as a core portfolio constituent. Indeed, for some, the 32% decline in the share price over the last year could well provide an attractive entry point.

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Kyle Caldwell, Funds and Investment Education Editor

I’m topping up my two core global holdings, which invest very differently, helping my ISA achieve diversification. I also have a smattering of satellite holdings exposed to emerging markets and themes such as biotechnology.

While it’s not the most exciting holding, I am happy to tuck away Vanguard FTSE All-World ETF USD Acc GBP (LSE:VWRP) with confidence over the long term. It tracks the fortunes of a global index comprised of large and mid-sized stocks in developed and emerging markets. It has a low yearly ongoing charges figure (OCF) of just 0.19% and has, over time, closely matched global stock market returns. Given greater volatility during the Middle East conflict, I am minded to invest regularly in smaller amounts to reduce risk.

The other investment is Scottish Mortgage Ord (LSE:SMT), an investment trust that I believe has plenty of potential to add value. Its investment approach of identifying the rare and exceptional companies that drive global markets over the long term sets it apart from rivals. Its top holding, SpaceX, which recently accounted for 19% of its assets, is widely expected to join the stock market this summer, which could boost SMT, which has been a long-term backer. For an active fund, its yearly charges are very low, too, with ongoing costs of 0.31%. 

Dzmitry Lipski, Head of Funds Research

The case for bonds remains intact, but the current backdrop is more complex. Markets are more sensitive to inflation, fiscal policy and rising government borrowing, with the return of so-called bond vigilantes (investors who demand higher yields to compensate for these risks) driving greater volatility but also a broader opportunity set across fixed income.

Therefore, flexible global strategic bond managers are better positioned. By actively shifting between duration and credit and rates, they can navigate changing conditions and capture income opportunities.

The Jupiter Strategic Bond I Acc fund is a strong example of such an approach. It is an unconstrained strategy designed to deliver both income and capital growth by dynamically allocating across the full fixed income spectrum. A highly experienced investment team led by Ariel Bezalel and Harry Richards combines top-down macro views with bottom-up security selection, adjusting interest rate sensitivity and credit risk as market conditions evolve.

Currently, over 50% is allocated to corporate bonds, complemented by around 30% in large rate-sensitive government bonds. Geographic exposure includes roughly 30% in the UK. The average credit quality sits around BB+, reflecting a balanced move down the credit spectrum to enhance income. The fund offers an attractive yield of around 4.5% and has demonstrated solid long-term performance and resilience.

Overall, the fund provides a credible “all-in-one” bond solution and a strong core holding within a diversified portfolio.

Victoria Scholar, Head of Investment

UK bank stocks took a hit in February into March, punished by the Middle East conflict, the energy shock, and concerns about UK economic growth.  

The sector has started to recover, and momentum has turned positive, but companies like NatWest Group (LSE:NWG), Lloyds Banking Group (LSE:LLOY), HSBC Holdings (LSE:HSBA), and Barclays (LSE:BARC) still have a long way to go to reclaim their early February highs, suggesting there could be potential for further upside from here.

If the Iran ceasefire is extended or a broader peace deal is agreed, cyclical risk assets like banks are likely to enjoy strong gains. Meanwhile, the UK economy is bracing for inflation, translating into a higher-for-longer interest rate outlook which supports banks’ net interest income.

Geopolitics aside, the fundamentals remain strong, with the sector delivering good quarterly results in February. It also offers attractive dividend yields with NatWest at 5.3%, HSBC at 4.2% and Lloyds at 3.6%. This is particularly valuable at a time of heightened market uncertainty. According to Refinitiv, there is a consensus ‘buy’ recommendation from the analyst community on HSBC, Lloyds, NatWest, and Barclays.

A way to express this theme is by buying either individual equities or via a fund like Artemis UK Select I Acc fund, which is overweight UK banks, with the five UK-listed lenders making up 25% of its long portfolio.

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Dave Baxter, Senior Fund Content Specialist

President Donald Trump’s antics aside, the US market remains home to many great companies. It’s also notoriously hard to beat, and one fund with a good record here is looking cheaper.

Star manager Bill Ackman and his team at Pershing Square Holdings Ord (LSE:PSH) look for predictable businesses with good free cash flow generation and formidable barriers to entry. Shareholders currently get a concentrated portfolio of mainly US-listed stocks, including Uber Technologies Inc (NYSE:UBER), Brookfield Corp Registered Shs -A- Limited Vtg (NYSE:BN), Universal Music Group NV (EURONEXT:UMG), Alphabet Inc Class A (NASDAQ:GOOGL), Amazon.com Inc (NASDAQ:AMZN), Meta Platforms Inc Class A (NASDAQ:META) and Howard Hughes Holdings Inc (NYSE:HHH). And, incredibly, the trust trades at a discount to net asset value of about 25%.

The trust’s shares returned around 26% in 2025 and have often outperformed the S&P 500 but are in a slump so far this year. That itself might appeal to the adventurous investor, but so might recent contrarian bets, including Amazon during last year’s tariff sell-off, and on Meta on the basis that investors are overly worried about its AI spending. That puts it at odds with some other well-known funds.

Those familiar with Ackman will be used to dramas and grand plans, from a recent bid for Universal Music Group to last year’s investment in Howard Hughes, aimed at building a holding company in the style of Berkshire Hathaway Inc Class B (NYSE:BRK.B), and various controversies. But Pershing Square remains a distinctive, focused offering that has at times substantially outperformed the US market.

Keith Bowman, Investment Analyst

A boom in AI has seen tech companies race to invest in infrastructure such as data centres needed to house AI software. More recently, war in the Middle East has further underlined the need for countries to diversify energy supplies away from oil and gas. 

FTSE 250 construction company Balfour Beatty (LSE:BBY) has the expertise to help. Annual results for 2025 announced mid-March detailed an order book up nearly a quarter year-over-year to a record £22.7 billion. That includes work on projects like the UK’s Sizewell C and Hinkley Point C nuclear power stations, the Teesside carbon capture project and data centres in America.

Balfour’s expertise in road and rail building is also in demand. It’s involved in the Lower Thames Crossing, a second contract helping Rolls-Royce complete work on nuclear submarines and is building a reputation in the defence sector.

Adjusted profit grew by 16% in 2025, underpinning a 12% hike in the annual dividend. Average group net cash, highlighted by management as a key health indicator, rose 58% to £1.21 billion.

Under relatively new chief executive Philip Hoare, Balfour holds its AGM on 7 May, which will also likely include a trading update. Exposure to popular themes make this well-known construction company attractive for the longer term.

Nina Kelly, Editorial Content Manager

The seven-year itch is a well-known concept, popularised by the Marilyn Monroe film. I reference it here not only because investing deserves the glamour, but also because I’m entering my seventh year of buying the same fund - Vanguard LifeStrategy 80% Equity A Acc - and I remain content with my choice.

I read with interest the changes Vanguard announced to its multi-asset fund range at the start of this year, smiling at the fee reduction from 0.22% to 0.20% - a win’s a win! - shrugging at the reduction in home bias, and Googling the new Global versions of the LifeStrategy range.

Above all, I am a buy and hold growth investor who enjoys the simplicity, low cost and diversification of my chosen fund. I like regularly investing each month into my ISA and benefiting from pound-cost averaging. Like the best restaurant music, I hope my investments can stay quietly in the background of my life, compounding working its magic, until I need to call on nest egg.

However, everyone likes a little excitement. So, I will invest a modest sum in a single stock this tax year. Not enough to be troubled if it tanks, but sufficient to generate a frisson of excitement if it does well. Perhaps Games Workshop Group (LSE:GAW), maybe Bloomsbury Publishing (LSE:BMY). I’m still deciding…

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