The countdown to the end of the tax year is on — and those who ignore their 7,000 pound ISA allowance do so at their peril. Early signs do not bode well for this year’s ISA season. Retail sales were notably weak in January, and although this month is usually a quiet one for subscriptions, the statistics paint a worrying picture: funds actually flowed out of the tax efficient accounts to the tune of 68 million pounds.

The data is, perhaps, not wholly surprisingly given the rollercoaster ride for stock markets that has shaken investor confidence. But withdrawing money from these tax-efficient savings vehicles — rather than switching the funds to lower risk asset classes, such as cash or more cautious investments — appears a very short-term reaction to an investment that should be viewed in the medium to long-term.

As Rebecca O’Keeffe, head of fund management at Interactive Investor, points out, had you missed the best 10 trading days on the UK stock market from 1990 to 2006, your average annual compound return almost halves — falling to 3.3 percent from 6 percent. Miss the worst 10 trading days and your annual return soars to 8.8 percent, but timing markets is impossible.

Investors should, therefore, adopt a time horizon of at least five years, and avoid knee-jerk reactions. Withdrawing money from your ISA is a final decision; you can’t put it back in and, therefore, you lose the long-term benefits. At a time when fiscal drag is pulling more and more people into higher tax brackets, council tax is rising and households’ purse-strings are coming under increasing pressure, any safe-haven from the ravages of tax should be welcomed with open arms.