The deadline for a stocks and shares ISA is 5 April. Millions of Britons use this tax-efficient investment vehicle every year. If we go back to the first trading day in 2025 (April 7) and assume that the investor put a total of £10,000 into FTSE 100 index Stocks, how will things stand now?

Big gains

The start of the IAS year in 2025 coincided with a major shake-up in financial markets due to concerns about US tariffs. As a result, the FTSE 100 index opened on April 7 at 7,699 points. A month later, it traded above 8,600 points, marking a sharp rebound as tensions eased.

The market now stands at 10,255 points, an increase of 33.2% in less than a year. This is a very impressive statistic and means that the investor would have an unrealized gain of £3,320. However, this is much higher than the historical rate of return. If the person had decided to put £10,000 into an ISA after just one month, the return would have been 19.2%.

The return assumes that the money has been placed in the index tracker. In fact, more active stock selection could have been used, which would have resulted in greater earnings volatility. For example, having a large allocation to Fresnillo He would have made a profit of 280%. On the other hand, any significant weighting for autotrader He would have lost 34%.

Next year

The 2026 ISA deadline is now less than a month away. As a result, it makes sense to start looking for opportunities. Of course, if an investor has free money now and only uses £10,000 of the current allowance, there is scope to buy now as the limit is £20,000. But if someone has already reached the limit, they will have to wait until April.

Please note that tax treatment depends on each client’s individual circumstances and may be subject to change in the future. The content in this article is provided for information purposes only. It is not intended to be, and does not constitute, any form of tax advice. Readers are responsible for conducting their own due diligence and obtaining professional advice before making any investment decisions.

One stock I like is… NatWest Group (LSE: NWG). The stock has been caught up in the recent market sell-off, but I don’t think the company is vulnerable to the situation in the Middle East. Therefore, this may be a short-term pullback and not anything more serious.

In fact, if energy prices remain high, it could push UK inflation higher and prompt the Bank of England to actually raise interest rates. This would boost NatWest’s net interest margin, which could lead to increased earnings later in the year.

Even without this factor, the outlook for next year looks bright. Last month, it announced it had acquired wealth management firm Evelyn Partners. This is its biggest deal in decades and shows a clear push to expand further in this area. Wealth management firms typically have higher margins and consistent income.

However, there are still risks. Fintech Revolut has just been granted a banking license in the UK, highlighting how competition is escalating and looking to take market share from traditional firms such as NatWest Group. Even so, I think it could be a stock to consider for an ISA next year.