0800 03 04 008ISAs
There are two main types of ISA:
- Cash ISA: A Cash ISA is typically a short term, easy access deposit based savings account
- Stocks and Shares ISA: A Stocks and Shares ISA is a medium-to-long-term investment account held in a tax wrapper where you can choose the underlying investments your money is invested in. It is a tax-efficient way for you to save or invest, but it should typically not be considered as a savings account to generate income.
We have been managing our clients Stocks and Shares ISAs alongside their pensions and other investments since 1999.
Putting money into an ISA
Each tax year (6 April to 5 April) you can put money into one of each kind of ISA. You can either save up to £20,000 in one type of account, or split the allowance across some or all of the other types.
Much like a Pension, an ISA is core financial planning tool and can simplistically be seen as a box – with different tax rules on entry and exit.
ISA
- No tax relief going in
- Tax efficient internal growth
- No tax paid going out
Pension
- Tax relief going in
- Tax efficient internal growth
- Tax paid going out
(after tax free lump sum has been taken)
If you complete a tax return, you don’t need to declare any ISA interest, income or capital gains on it.
Use your personal allowances and don’t neglect what is inside your ISA. Like your Pension your Stocks and Shares ISA should be regularly reviewed to make sure it remains suitably invested within the context of your financial plan.
Other than for final salary (DB) pensions transfer advice, we do not charge you unless you decide to go ahead with our recommendations.
Should you decide not to go ahead, we will not
charge you for any time up until that point.
Other forms of ISAs include Lifetime ISAs, Help to Buy ISAs and Junior ISAs, you can elect between a Cash or Stocks and Shares version. There is also a more specialist Innovative Finance ISA.
Where you choose to save into, invest and draw and income from depends on your personal circumstances and the consequential tax implications of your wider arrangements. Your Financial Planner is there to help you navigate the options available to you and make the most of your personal tax allowances.
