Sunday 2 March F inancial providers are all competing to lure savers and investors into picking their Isa products for this year's allowance. If you fail to use your full Isa allowance before the end of the financial year, you cannot roll it over. However, while the message is "use it or lose it", make sure you don't get caught up in Isa season hype by avoiding 10 classic mistakes.

The most generous cash Isa accounts often come with high introductory rates of interest — but these offers only last for a set period, typically a year, before the rate is slashed, often to paltry levels. For example, Halifax's online Isa offers a headline rate of 1. Savers who forget to take advantage of their right to switch accounts at this stage risk losing out. For a provider that tends to offer consistently decent rates, Andrew Hagger at MoneyComms picks Nationwide, now offering an instant-access Isa paying 1.

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If access to your cash is not an issue you could opt for a fixed-rate Isa, which typically offer higher rates. An Isa is not an investment in its own right. It is simply a savings wrapper that can make a savings account or investment plan more tax efficient. To maximise gains, focus on the underlying investments and which are right for you given your aims, attitude to risk and the assets you already hold.

An investor looking to build savings for retirement in 20 years' time, for example, might want to focus on stock market funds that may prove volatile but will hopefully generate higher returns in the long term.

By contrast, a saver needing a short-term emergency fund should steer towards cash savings. The cost of investing can have a significant effect on returns over longer periods of time.

For example, passive funds, or trackers, come with low annual management charges of 0. However, an active fund with a manager whose job is to pick shares to outperform the market will charge around 0.

The cheapest and simplest way to manage your investment portfolio is through an online investment website where you can buy funds.

Find details of the best for you at www. Isa rules allow investors to hold a wide range of assets, including cash, fixed-income, collective investment funds and individual shares. Too few investors take advantage of this flexibility in order to spread their bets, putting their money into the same asset year after year, says Danny Cox from independent financial adviser Hargreaves Lansdown.

So consider if you are investing across different geographic regions and sectors, with some held in cash for a rainy day, for a truly diversified portfolio. Avoiding piling this year's Isa allowance into particular funds without first checking how you've used this in previous years.

Instead, each year's Isa decision needs to be taken in the context of a long-term strategy designed to realise your financial goals, says Connolly. If you can't afford to risk your savings falling in value, stick with cash, but investors who can take a long-term perspective are likely to earn better returns by being more adventurous — and with interest rates low, the tax savings from holding cash in an Isa are minuscule.

If investments you have made in the past — whether in cash or stocks and shares Isas — haven't turned out as well as you hoped, move them. Some cash Isas, for example, can pay as little as 0.

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If you inadvertently break the Isa rules, you'll lose your tax advantages. Try to make this the last time you leave it until the end of the tax year to use your Isa allowance. Invest at the beginning instead and your money is working for an additional 11 months.

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