It was a good Budget for investors.

That was the response from the market after Chancellor George Osborne delivered a business-friendly package that may not set economic growth on fire, but did nothing to dampen the case for shares versus cash.

Alasdair Ronald, divisional director of Brewin Dolphin in Glasgow, said: "The cut in corporation tax will benefit those companies with significant exposure to the UK. We expect earnings estimates for the mid-cap companies, which are not as globally diversified as their larger peers, to improve on the bottom line. Overall, a Budget that is positive for business, positive for the regions and so should be supportive of equity markets."

Loading article content

Gavin Oldham, chief executive at The Share Centre, added: "The broad themes of the 2012 budget are good news for UK business, although unlikely to result in any elaborate moves in share price. A number of sectors will benefit – North Sea oil companies, infrastructure, technology, the creative arts and life services."

With the end of the tax year fast approaching on April 5, investors have only a short time to make full use of their annual Isa allowance.

The Chancellor ignored calls to relax the restrictions on cash Isas, which means those with more spare than the cash-Isa limit of £5340 should consider putting the excess into a stocks-and-shares Isa which doubles the tax-free allowance to £10,680. Those limits rise from April 6 to £5640 and £11,280.

Investing in a stocks-and-shares Isa is more risky than putting your money in a cash Isa but low interest on cash accounts at present, and the need to keep shopping around for new accounts when introductory bonuses taper off, is making stocks-and-shares Isas more attractive.

If you are prepared to put your money away for the longer term there is the prospect of getting significantly better returns. Historically shares have outperformed cash accounts over five years or longer.

It is also increasingly easy to open a stocks-and-shares Isa through one of the growing number of consumer investment platforms, such as Alliance Trust Savings or Hargreaves Lansdown, or stockbrokers such as The Share Centre. Barclays has revamped its service to make it more user-friendly and offers a wide choice of low-cost ISAs.

A stocks-and-shares Isa can be used as a tax-efficient wrapper for investments including funds and investment trusts investing in the UK or in overseas shares, or fixed-interest securities, or you can choose your own shares for your Isa. Once these investments are in an Isa, there is no further tax to pay on the income or capital gains they may generate.

Your investment choice will depend on how cautious or adventurous you are. For more cautious Isa investors, David Thomson, chief investment officer at VWM Wealth Management, suggests a diversified fund. Thomson explains: "I would recommend either a fund of funds such as Jupiter Merlin Income, which invests in a variety of income funds with different managers so your risk is broadly spread, or a fund with a spread of assets such as Investec Cautious Managed, where bonds and shares are combined to reduce risk."

Bond funds are normally regarded as a natural choice for cautious ISA investors but Richard Wadsworth, of Glasgow independent investment adviser, Fitzallan, says bond prices have risen so high that they look vulnerable. He also recommends an Investec fund. He says: "I like Investec Capital Accumulator managed by Alastair Mundy. It aims to produce better returns than cash but without the volatility of shares. It invests mainly in structured products. This makes it more difficult to understand but Mundy knows what he is doing."

Wadsworth's other cautious choice is the investment trust, Personal Assets. "This global growth trust has always been managed in a conservative way with capital preservation as its main goal," he says.

However, if you want to be more adventurous with your stocks-and-shares Isa, you might look to the faster-growing economies of the Far East. Thomson recommends an income fund. He says: "We like Newton Asian Income. We are keen on the Far East and the emerging economies generally because we believe they will still enjoy good economic growth, whereas the prospects for growth in the UK are lacklustre."

Wadsworth's suggestions for more adventurous Isa investors are either a tracker fund or a global growth fund. He likes Vanguard's low-cost UK Equity Index Fund which tracks the FTSE All Share Index. He explains: "This type of fund can be volatile as it will move up and down with the stock market but in the long term trackers often outperform actively managed funds. But I also like Baillie Gifford's Edinburgh Worldwide investment trust which has a concentrated portfolio of around 40 shares."

For those who want to choose their own shares for an Isa, Graham Spooner, investment research analyst at The Share Centre, suggests those looking for a higher-risk growth opportunity may wish to consider Afren, an oil and gas company, while for those seeking growth among large companies he recommends BG Group, the gas provider, or commodity company BHP Billiton.

Douglas Lamb decided to venture into a stocks-and-shares Isa because he sees cash Isa rates as "derisory".

He says: "To a certain extent it depends when you go into the market, but there are a lot of quite good opportunities at the moment with the fluctuations, certainly in my opinion there is more scope for benefit from the stocks-and-shares Isa."

Lamb, 68, is in the process of restoring a classic Lotus car, and says he is not peering at the stock market screen every day. "I would be inclined to leave decisions to my advisers, I don't feel confident enough in my own mind."

He uses Skipton Financial Services because it offers a monitored investment service, with free switches between investments if any start to underperform. "I get reports on a very regular basis and that is what I like about it."