Stocks and Shares ISAs
ISAs are a tax efficient way to save money but, unlike a cash ISA, a stocks and shares ISA comes with the risks and benefits of investing in the Stock Market. This means that, with interest rates low, they have the potential to give far better returns but, with the money being invested in stocks and shares, it also has the risk that the value could go down rather than up.
A major benefit of stocks and shares ISAs, along with other types of ISA, is that you can invest up to £20,000 per tax year in them tax-free. Investors can spread this allowance across cash ISAs, stocks and shares ISAs, lifetime or innovative finance ISAs if they so wish, or put it all into one. Depending on which type of stocks and shares ISA you choose, you can invest the money in unit trusts, shares, investment trusts, exchange-traded funds, index funds, government bonds, corporate bonds and cash. Different types of stocks and shares ISAs allow you to invest in different ways and you can either invest in different funds as you choose or opt for a ‘pre-packaged’ set of funds put together by an expert to diversify the investment and minimise the risk.
What you do with your £20,000 yearly ISA tax allowance will depend hugely on your circumstances and what you are looking to achieve with it. That’s why we have a long and in-depth discussion with you about these things before making a recommendation. We can help you choose which types of ISAs would best suit your needs and, if you choose a stocks and shares ISA either on its own or as part of an extensive investment portfolio, we can talk you through your options to help you decide which stocks and shares ISA to choose.
Risk Warning: The value of units can fall as well as rise, and you may not get back all of your original investment