Your money questions answered: Mortgages, ISAs and what to do before 5 April

Global tensions – including the conflict in Iran – are adding volatility to markets, shifting expectations around Bank of England rate cuts and pushing mortgage costs higher, with cheaper deals already disappearing.

During my latest Ask Me Anything live Q&A for The Independent, readers asked how to respond – from whether to fix their mortgage now, to cutting energy bills and whether market volatility should put them off investing.

I explained that while conditions are shifting quickly, the fundamentals remain the same: focus on what you can afford, build an emergency buffer, and avoid reacting to short-term headlines.

With the tax year ending on 5 April, many questions also centred on ISAs and tax. I urged readers to use as much of their £20,000 ISA allowance as possible and highlighted how pensions can help reduce tax around key thresholds.

Here are some of your questions – and my answers from the Q&A:

Q: Should I fix my mortgage now or wait?

Sophieeeeeee

A: Really timely question, because mortgage rates right now are being heavily influenced by what’s going on in the world.

Before the Iran conflict escalated, we were on track to see further interest rate cuts from the Bank of England, which would have likely fed through into cheaper mortgages. The direction of travel felt clear. But that’s flipped in recent weeks.

Markets are now pricing in the possibility that the Bank of England increases the base rate instead. Some predict the base rate could hit 4.25%, and we’re already seeing hundreds of mortgage products being pulled from the market, particularly anything below 4%.

So what would I actually do?

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If you’ve got six months or less until your current deal ends, start looking to lock something in now. Most lenders will let you secure a rate early and switch if something better comes along, so you’re not losing flexibility by moving quickly. Good practice in any market, but especially right now.

If you’re a first-time buyer or weighing up whether to move now or wait, you’re seeing in real time how fast things can shift. The first thing I’d do is speak to a mortgage broker. There are free ones out there who’ll search the whole market for your specific situation, so there’s really no excuse not to.

My broader view on mortgages has always been this: the present is known, the future isn’t. If you were waiting for rates to fall and they’ve gone the other way, and the deal you could have got yesterday is gone today, you’ll be kicking yourself. We’re literally watching that happen right now.

So if you can genuinely afford a mortgage today, it fits your budget, and you’ve done all the sensible checks, there’s a strong case for just going for it.

If rates rise, you’ll be glad you are locked in. If they fall, you’re still in a position you can afford. Two months ago, waiting made sense. Today, that calculation has changed.

Q: Cash ISA or stocks and shares ISA?

Jimmy

A: Great question, but let me reframe it slightly because this isn’t cash ISA versus stocks and shares ISA. They work in tandem. The right answer just depends on what you’re trying to do with your money.

A cash ISA is for short-term goals. Anything you need within five years: a house deposit, a wedding, a car, an emergency fund. Money that needs to stay stable and protected.

A stocks and shares ISA is for long-term goals. Money you won’t need for five years or more, where the whole point is growth over time.

Does economic uncertainty change that? Not for me. Here’s why.

Historically, seven of the ten best days in the S&P 500 occurred within two weeks of the ten worst days. The biggest gains often come right in the middle of the scariest moments. Pull out to avoid the bad days and you’ll almost certainly miss the best ones too.

Time in the market beats timing the market. If you’re moving in and out based on headlines, you’re not investing any more, you’re trading. Go back to basics. What is this money for, and when do you need it? Less than five years, cash ISA. More than five years, stocks and shares ISA. That’s genuinely all it comes down to.

One timely nudge is that 5 April is the last day of this tax year. Your £20,000 ISA allowance resets on 6 April and you cannot carry it over. If you haven’t used it, now is the time.

Q: How can I cut energy bills?

Robbie

A: Those £50-a-month days are sadly long gone, and it’s time to make peace with that. But having said that, there are still some smart things you can do!

The single biggest thing you can do is check your tariff and be willing to switch. A lot of people are just sitting on a standard variable rate and going wherever the price cap takes them. With global uncertainty pushing energy costs back up right now, locking into a fixed deal could genuinely be one of the most impactful financial moves you make this year. It takes five minutes on a comparison site.

Beyond that, here are my three practical tips.

Turn your thermostat down by 1°C. Most people cannot feel the difference between 21°C and 20°C, but your bill absolutely can. That one degree can save you up to £145 a year. My house is currently operating at 18°C – plus a lot of hot drinks!

Stop heating an empty home. I used to leave the house and realise halfway down the road the heating was still blasting. Smart controls let you manage it from your phone wherever you are, and they pay for themselves faster than you’d think.

Run things at off-peak times. Some tariffs give you significantly cheaper rates at certain hours. Mine has very cheap rates between 2am and 5am, so that’s when my washing machine, dishwasher and dryer run on timers. Avoiding peak hours in the late afternoon, roughly 4pm to 7pm, for the big appliances makes a difference too (tariff depending).

Q: Overpay mortgage or build savings?

Zasha

A: One thing comes first: your emergency fund. Three to six months of living expenses sitting in easy-access savings. That safety net is what stops one unexpected bill from pushing you into crisis or deeper debt. Build that before you think about anything else.

Once that’s sorted, here’s how I think about it.

Mathematical approach – compare your mortgage interest rate to what your savings or investments can earn. If your savings are earning more interest than your mortgage costs you, your money works harder there. If your mortgage rate is higher, overpaying becomes the better guaranteed return. Follow the numbers.

Psychological approach – some people hate carrying debt and want it gone as fast as possible. Others have short-term goals – a holiday, a car, a bit of financial breathing room – things that overpaying a mortgage simply won’t help with. Neither approach is wrong. It comes down to what you actually want your money to do for you right now.

For what it’s worth, here is my personal order of priority: 1 – emergency fund 2 – clear any high-interest debt like credit cards or personal loans (a mortgage rarely falls into this category) 3 – short-term savings goals, because life is happening now, not just in 25 years 4 – long-term investing over mortgage overpayments, because mortgage debt is typically the cheapest debt you will ever have, and historically investing has outperformed average mortgage rates over time

But that last one is personal. If carrying debt keeps you up at night, your peace of mind has real value too. Let that guide you.

Q: One financial move before 6 April?

Anonymous

A: If you do one thing before 6 April, make it this.

Use as much of your ISA allowance as you can.

It’s £20,000 this tax year and it is genuinely use it or lose it. The moment 6 April arrives, that allowance is gone. You cannot carry it over, ever.

Max it out if you can. If you can’t, put in whatever you’re able to. Cash ISA, stocks and shares ISA, lifetime ISA, or a mix of all three.

Less than two weeks left. Don’t be the person who misses it by a day.

Q: How can I reduce my tax bill on £50k+?

Anonymous

A: Earning just over £50,000 puts you right on a key threshold. Income tax bands have been frozen since 2021 and have now been extended all the way to 2031, which means more and more people are being quietly pulled into higher-rate tax without actually earning more in real terms. So this is worth paying attention to.

Your biggest lever is pension contributions. Every pound you put in reduces your taxable income. Bring your adjusted income below £50,270 and you stay in the basic rate band, avoiding 40% tax on that portion. If your employer offers salary sacrifice, even better, because you save on National Insurance too, not just income tax.

Check your other salary sacrifice options – cycle to work schemes, electric vehicle leasing, childcare support. Most people never actually look into what their employer offers.

Use your ISA allowance. It won’t cut your tax bill today, but it protects everything inside it from tax going forward.

If you have children and claim Child Benefit, or are approaching £60,000, pay close attention. The High Income Child Benefit Charge kicks in at £60,000. If you’re heading that way, pension contributions can bring your adjusted net income down and reduce or eliminate that charge entirely.

The bottom line is you don’t need to earn less to pay less tax. You just need to be smart about what counts as taxable income.

These questions and answers were part of an ‘Ask Me Anything’ hosted by Gabriel Nussbaum at 12pm GMT on Tuesday 24 March. Some of the questions and answers have been edited for this article. You can read the full discussion in the comments section of the original article.

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