What is an ISA?

Available since April 1999, ISAs offer a tax-free wrapper to anyone who is eligible.
ISAs allow individuals to invest in a range of investments and savings and pay no personal tax at all on their income and/or any profits received.

We advise on two types of ISAs:

  • Cash ISA
  • stocks and shares ISA

All of your allowance can be invested in stocks and shares or in cash. Alternatively, you can split the amount by investing in cash and stocks and shares with either the same or a different provider, subject to the maximum allowance.

You will also be able to transfer money saved in previous years; cash ISA holdings to stocks and shares ISAs or in the opposite direction i.e., stocks and shares ISA to a cash ISA. (This does not affect your current years allowance)

ISAs and the financial year

With an ISA you can put up to /£20,000 into your account every financial year. You can split the allowance across all your different types of ISAs with the £20000.

An example of this would be:

If you are planning on putting £20000 into your ISA accounts, you could put £12000 into your cash ISA and £8000 into your stocks and shares ISA.
Any Investment growth made in your ISA accounts will not count towards the £20000 and will not be affected by taxes such as: Capital gains tax and income tax.

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This one of the most common ISAs what people use as it is low-risk way to save your money.
Cash ISAs split into 2 sections known as variable and fixed rate.
With a variable cash ISA, the rate can change at any time, but you are able to take out
money from the account whenever you want with easy access.
For the Fixed cash ISA, the rate of the interest is fixed for the duration of the account, the
longer the account is set to be open the more likely you will have a higher rate. Usually, you
can’t access the money until the term has ended.
EXTRA – For the flexible cash ISA you can take out money from the account and replace it
without affecting the £20000 allowed to be placed into your ISA accounts.
A Stocks & Shares ISA can be used to save up for a number of purposes, whether it be saving for children’s education, paying off your mortgage, a rainy day or to simply accumulating wealth.

Are you Eligible?

To be eligible to invest for an ISA, an investor must be an individual (i.e., not a company or trustee), 18 years old (16+ for a cash ISA), who is resident and ordinarily resident in the UK (or is a Crown servant serving overseas or the spouse of such an individual who accompanies their spouse abroad).

If you become ineligible to invest in an ISA, any existing ISAs will continue to be exempt from UK tax. Future contributions to regular investment ISAs must be terminated and no further single contributions may be made.

What are the benefits of investing in a Stocks & Shares ISA?

Cash ISAs v Stocks & Shares ISAs.

Stocks and shares Isa are not restricted by providers interest rate. cash isa rates tend to lower than inflation, meaning what is saved in them can remain static.
Comparing stocks & shares Isa investing money in this type of investment can mean a chance of increased growth. There is a risk that any money you invest you may get less than you put in.
Cash ISA are recommended for short term saving e.g holiday, or for emergencies. Stock and shares are classed as long term investments 5 years+. The benefit of investing for 5 years+ is a chance of greater growth.
It’s important to remember that, as with all investing, your capital is at risk in a General Investment Account. Investments can fluctuate in value and you may get back less than you invest.

Different investments provide

 

capital and growth, income and A combination of income and growth

What is a General Investment Account?

Investing for longer means putting money into products or funds linked to the stock market. There is a risk of investing in funds, which could rise or fall in value. Investors need to be prepared to tie their money up.
There is no limit on how much you can invest each year. Potential for growth but capital is at risk and returns not guaranteed.

ready to do more with your Investments?

If you’d like to find out if our service is right for you and how we can help you do more with your money, please get in touch. There’s no obligation and our friendly team will talk you through your options.

Tax Efficient

ISAs are one of the most Tax efficient ways to save – as there is no tax to pay on any investment or income you get from an ISA, and there is no tax payable on any capital gains arising.

Flexible

You can save in cash or invest in a wide range of stock market-related investments and in most cases access your money at any time. You can also consolidate current or previous tax years into a single ISA or provider.

Annual ISA Allowance

You have an opportunity to save up to £20,000 in an ISA in this tax year (2021/22) – and if you don’t use it, you will lose it. You cant carry over any unused ISA allowance into the next tax year.

Simple

Not having to pay tax on y0ur ISA means you do not need to include it on your end of year tax return.

Inheritance

If an ISA holder dies, the surviving spouse or civil partner is entitled to an extra ISA allowance – known as the Additional Permitted Subscriptions (APS) – equal to the value of the ISA(s) held by your partner. This is in addition yo – and independent of – your own annual ISA allowance.