Could Apple pay for my new kitchen?

Jaspert also wonders whether she should prioritise taking money out of the best-performing funds — she has five in total (including Polar Capital Technology, which holds tech firms such as Apple and Microsoft) — or those that are not doing so well.

Jaspert said: “I run my business alongside my work as a teacher. The money would be used to buy stock, build a new website and invest in online advertising. We have an emergency savings fund in place, and my husband works full time, although I don’t have a great pension. Is now the time to dip into my Isa?”

We asked three experts for their thoughts.

Kristen Cunliffe

The managing director of Red Star Wealth, a financial adviser
Jaspert should first consider whether she would be comfortable taking on debt.

Generally debt should be avoided and certainly borrowing money for a new business venture could be risky. However, if she used a vehicle such as a 0 per cent credit card, she could repay the debt from her business profits — knowing she has her Isa as a “backup” if the business does not generate what she needs. A number of credit card providers, including Barclaycard and M&S Bank, offer 0 per cent interest on purchases for 23 or 24 months.

On the other hand, there has been significant growth in some of her investment funds and she may feel that using the capital growth to fund her business venture is a good use of the “profits”. Withdrawing from the highest-performing funds would rebalance her portfolio overall — reducing the investment back to its starting position, allowing her to secure her profits.

It is hard to say whether her fund choice looks about right without knowing her attitude to risk and her objectives, but the funds she has are very specialised and carry a higher risk. Lower risk options could include Vanguard’s LifeStrategy 40% Equity or Liontrust’s Sustainable Future Cautious Managed fund.

● A beginner’s guide to Isas: the seven ways to save
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She might want to consider building up an emergency fund. Six months’ worth of outgoings is a good guide. Half could be held in premium bonds, giving the option to win tax-free cash, and the rest in cash savings accounts. These accounts pay very little interest, with the top rate for an easy-access account at 0.84 per cent with Cynergy Bank, but the primary purpose is a safe financial cushion.

Claire Harlow

Taylor Made Financial Planning
Before taking money out of her Isa Jaspert should consider if she can confidently match her investment returns through her business, even if this is not straight away.

Next she should consider if she is likely to need any more money in the future. She should bear in mind that money in her Isa is likely to be more accessible than money in her business.

That said, the numbers are only one side of this decision. A new kitchen might make a huge difference to her life which, of course, has a value too.

In terms of the funds themselves, while her investments include some diversification and strong performers, they are high-risk choices for money that she might need in the short-term. Most markets have enjoyed strong returns since March 2020, but the volatility this year is a reminder of the unpredictability of investment markets.

I suggest she matches her risk to her needs and timeframe — the sooner she needs the money, the less risk she should take. There are low-cost, diversified fund ranges available for a variety of different investment risk appetites. For example, abrdn’s MyFolio ranges are suitable for different risk tolerances.

Isas are great for potentially growing your money and not having to worry about tax. But that makes them valuable. So they should be drawn from with caution and, ideally, only if you have a better plan to grow your money.

Emma Jones

The founder of Enterprise Nation, a business support company
Other funding options for the business she could consider before dipping into her Isa could include the government-backed Start Up Loans, which offers up to £25,000 as a personal loan with a fixed interest rate of 6 per cent to be paid back over up to five years. This also comes with mentoring.

Another option is a Dragons’ Den-style equity deal, which means giving away an agreed percentage to an individual investor. There is funding aimed at female founders via the Angel Investment Network. She could also consider raising funds through a crowdfunding platform such as Crowdfunder.

She should contact her local authority to see what grants are available but they may require some form of match-funding from her own savings.

To keep start-up costs lean, her business would benefit from selling via powerful global platforms like Amazon or Etsy. I would also suggest a focus on sustainable products, locally sourced, which is a key trend where there is growing demand from customers.

Jaspert replies
This is all really helpful — I hadn’t considered credit cards. I also think I should adjust my investment risk level as my savings priorities are now shorter term and I may access the money soon.

Millie Jaspert’s five funds

● Stewart Investors Asia Pacific Leaders Sustainability, which invests in large and medium firms in the region. It’s up 26 per cent since she invested in January 2017

● Polar Capital Technology Trust, which holds the firms Apple and Amazon and has grown 71 per cent

● IFSL Marlborough UK Micro-Cap Growth, up 47 per cent

● Jupiter India, which invests in firms in India and is up 20 per cent

● ASI Global Smaller Companies, which she bought in September 2018 and has grown 19 per cent