Staying the course: why your regular investment habit matters most at times of uncertainty
Watching the news lately – energy prices, inflation, political uncertainty at home and abroad – it would be understandable if you were feeling uneasy about your investments. And you're not alone. Markets are unsettled, and it's natural to wonder whether now is the right time to keep going, or whether it might be wiser to pause.
Our advice? Keep going. Here's why.
Habit is the strategy
Clients who invest regularly – a fixed amount each month into an ISA or pension, regardless of what markets are doing – are already using one of the most effective tools available to long-term investors. It's called pound cost averaging, and its power is most visible precisely when markets are difficult.
When prices fall, your regular contribution buys more units than it would have at the peak. When they recover, those additional units come with you. The investor who keeps contributing through a downturn often ends up in a stronger position than the one who paused and waited for confidence to return – because by the time confidence returns, so have prices.
In short: you don't need to time markets correctly; you just need to stay the course.
The pension case
For clients contributing regularly into a pension, the argument for staying in is even stronger, as the starting position is already advantageous. A basic-rate taxpayer contributing £100 effectively pays £80, with the government topping up the rest. For a higher-rate taxpayer, that same £100 contribution effectively costs £60. Those figures stay the same regardless of market uncertainty (although they will be slightly different for Scottish taxpayers). The tax relief is immediate; the growth potential is long-term. Pulling back on contributions doesn't just remove you from the market, it means walking away from relief you can't claim back.
Making your cash work harder
For those with cash building up in savings accounts, it’s worth getting clear about what your cash is actually doing for you. Interest rates have improved in recent years, but savings income above your Personal Savings Allowance is taxable – and inflation continues to erode real value, even when headline rates look reasonable.
There's also a structural change coming that's worth acting on before April 2027. The Cash ISA allowance for under-65s will fall from £20,000 to £12,000. The overall ISA allowance stays at £20,000, meaning the remaining £8,000 would need to go into a Stocks and Shares ISA to use your full entitlement. The 2026/27 tax year is the last in which the full £20,000 can go into cash – making this a timely moment to think about how your allowance is allocated.
Redirecting some of that cash into a regular investment plan, rather than a lump sum, sidesteps the anxiety of committing everything at once. It means the same tax efficiency, but less exposure to a single entry point.
A review is not a retreat
If current conditions have prompted you to look more closely at your financial plan, that's a reasonable and useful response. The question worth asking isn't whether to keep going, but whether your current contribution level, investment mix and timeframe still reflect your circumstances. Those things do change, and there's nothing wrong with revisiting a plan that no longer quite fits.
It’s not about timing
The evidence from previous periods of market uncertainty is broadly encouraging, even if the path is rarely smooth. The more useful question is whether your plan is structured to take advantage of that when it happens – and whether the cash sitting outside your investments is working as hard as it could be in the meantime.
If you'd like to talk through your current position and setting up regular contributions, or review how your contributions are set up, we're here. Get in touch with your adviser or contact us at enquiries@mchardyprivatewealth.co.uk
