If you’re looking for a tax-efficient savings vehicle and are comfortable with an element of risk, a stocks & shares ISA could be for you. It’s essentially a tax-efficient wrapper for your savings, but rather than keeping it in cash, your money is invested in the stock market.
The account will be linked to the performance of stock markets or specific funds, depending on the type you choose, and the returns you get will be based on that performance. However, this is where the risk comes in – the value of your investments can fall as well as rise and your capital isn’t guaranteed, so you may get back less than you put in.
Whichever stocks and shares ISA you choose, you will need to make sure the funds you invest in meet your objectives and you are comfortable with the level of risk involved. You should regularly review the performance of your chosen funds to ensure they are suitable for you over the longer term. Remember, this kind of account will always be riskier than a cash ISA, and it should be viewed as a long-term investment to counter the risks of stock market volatility. Tax advantages will depend on your circumstances and may change in the future.
The list of ISAs given below is not a best buy chart or a whole of market overview. Moneyfacts.co.uk will be paid an introduction fee if you invest via any of the providers listed. These are non-advised services; if you’re unsure, please seek investment advice.
Get an intelligent stocks & shares ISA portfolio, fully managed by our expert team. No tie-ins, no set-up fees, no exit charges. Easy, online set up in minutes. Start with as little as £500 (plus £100 per month for ISAs below £5,000). One simple annual portfolio management fee – 0.3% to 0.95% depending on how much you invest, incl VAT. Regular rebalancing – at no extra cost – plus, live chat, amazing customer support and brilliant investor tools and guides. Regulated by the FCA and protected by the FSCS. Capital at risk.
Virgin Money’s passively managed range offers a choice of five funds. Each with a different level of risk and potential reward so you can choose the fund(s) that best meet your needs. Generally, the more risk you are prepared to take with your money the greater the potential reward.
There is an annual ongoing charge of 1% of the value of your fund – no other charges.
Remember, the value of your investment can go down as well as up and you may get back less than you invest.
Further information... Award winning - we help you take control of your investments.
Low cost investing charge of 0.35% p.a. if you invest up to £250kand reducing to 0.20% p.a. if you invest £250k or more. Fund manager charges will also apply.
Take advantage of our useful tools and videos as well as our UK-based Customer Support Team. Choose from over 1,250 funds or our All-in-One funds managed to different risk levels.
The value of a Stocks and Shares ISA can go down as well as up and you could get back less than you invest.
Further information...Barclays Stockbrokers has been voted ‘Self Select ISA Provider of the Year 2016’ by ADVFN. Use our investment research, market insight and tools to help you take control of your investments and choose what’s right for you – with access to over 2,000 funds, ETFs, bonds, gilts & more. Now with ISA flexibility, withdraw and replace cash from a flexible ISA during the same tax year without it counting towards your annual ISA allowance.
Remember, the value of your investments can go down as well as up and you may get less than you invest. Tax rules may change in the future and whether particular tax rules benefit you, will depend on your individual circumstances.
MoneyFarm Stocks and Shares ISA offers a personalised, hassle-free, tax-free investment solution. MoneyFarm crafts a tailor made portfolio suited to your profile and fully manages it on your behalf, so you don't have to. There is no minimum investment and fee goes from 0% to 0.6% with no extra costs, plus the first £10.000 are always managed free of charge.
Regulated by the FCA and protected by the FSCS. Your capital is at risk.
£20,000 managed free of charge for 1 year with code MFACT20K.
We offer a choice of over 4,000 investments. You can save regularly in our ISA from £50 a month and stop, start and change your payments whenever you like. 24/7 access to manage your ISA online. Account fees that don’t grow with your investment with our low monthly account charge of £7.50.
This With-Profits Fund makes investing easy. Choose to invest over the medium to long term from just £10 a month or £100 lump sum.
Enjoy complete flexibility and control. You’ll have 24/7 online access, and the option to stop, start, increase or decrease your payments - with no penalties. There’s also a money-back guarantee on set dates, provided you’ve not made any withdrawals plus M&S vouchers to thank you for investing.
Capital at risk. Provided by Scottish Friendly.
Our Investment ISA is a Stocks & Shares ISA, and has the potential to provide better returns than a savings account. We have three Managed Funds to choose from which invest in a wide variety of non-cash assets on your behalf.
Our Investment ISA is a tax-efficient way to make your savings work harder. Capital at risk. Apply now!
A tax-efficient way to help you save for the future. Our Stocks & Shares ISA gives you the flexibility to hold cash as well as investments - so you can hold your money in cash if you are concerned about the market's prospects, and move into investments when you believe they have more potential. Invest up to £15,240 in the 2015/16 tax year. Capital at risk. ISA eligibility applies. All tax rules may change. Fidelity Personal Investing does not give advice.
Further information...Our stocks and shares ISA gives you access to a wide range of investments
and tools to help you confidently choose where to invest your ISA allowance. Choose from a Recommended List of over 50 funds selected
by experts or if you don’t want to spend time researching, you could choose from our Quick Start range of six funds.
Take advantage of our £5.95 online share dealing rate in your first three months and pay £0 admin fee if you invest £5,100 or more in
Investments may go down as well as up and you may not get back all the money you invest. TD provides opinions on
whether to buy a specific investment, none of these are personal recommendations.
Deal online from just £4.95 and never pay more than £9.95 per online deal
Further information...Complete the application process in a matter of minutes and manage your investments easily online. Upon signing up, you’ll also get a Stocks and Shares ISA cash account so you can hold some or all of your £15,240 in cash. Bear in mind that, as with any investment, your capital is at risk and your investment value can go down as well as up.
You can also join our MoneyPlus Community to share any experiences or questions you have about your investments.
The Hargreaves Stocks and Shares ISA has no dealing charges for funds, plus a low cost reinvestment service. There are super low annual charges on a range of leading funds, exclusive low charges on leading tracker funds and low annual account charge for funds of just 0.45%
94% of our clients rate our service as good, very good or excellent.
(Survey in September, 2014 9,371 respondents)
You can open your Shepherds ISA from just £30 per month, or with a £500 lump sum, and can vary your premiums and add lump sums when you like. The account is simple to understand and easy to apply for, making it an ideal place to start your savings journey
Dreaming of the trip of a lifetime? A fund for your retirement? Putting
down a deposit for a family home? With a My Select (New ISA) from
Scottish Friendly you can start investing now for the future, whatever
your dreams may be. Build a tax-efficient investment starting from as little
as £10 per month..
My Funds Options (New ISA) is designed to give you a choice between the potential returns you might make on your money and the risk you are willing to take. It's affordable too, with investments starting from as little as £10 a month.
Start investing for your child's future today. Open a Junior ISA from £10 a month. Get £50 cashback when you pay in at least £50. Capital at risk. £50 early exit fee applies within the first 5 years.
Start investing for your future from £10 a month. Choose from a range of funds to suit your investment goals. Get £50 cashback when you pay in at least £50. Capital at risk. £50 early exit fee applies within the first 5 years.
A stocks & shares ISA (otherwise known as an equity or investment ISA) is a way to invest in a wide range of funds on the stock market while retaining the tax-efficient element of a traditional cash ISA, with the money held being exempt from income and capital gains tax (other than dividends which may be subject to a tax charge depending on the amount of dividend income you receive).
Unlike cash ISAs, however, the stocks & shares version will actively invest your money across your choice of funds in the stock market. The majority of such accounts use collective investment funds, such as Unit Trusts or Open Ended Investment Companies (OEICs), and investors can either receive a form of income during the term of their investment or can wait until they encash their investment.
The key difference between cash ISAs and equity ISAs is that the cash version holds onto your cash and pays interest at a set rate, while an equity ISA actively invests your money into external funds or company shares for the potential of bigger returns.
However, an equity ISA is not a savings account and should be viewed as an investment product. It's a higher-risk home for your money with the returns based on the performance of the specific funds, and there's a chance you could lose some or all of your initial investment. There are different rules regarding FSCS protection too, with investors currently covered for up to £50,000 instead of the £75,000 that cash ISA savers benefit from.
Stocks & shares ISAs are more complex than cash versions. There are a number of different products you can choose from and funds you can invest in depending on your goals, with the key decision being whether you want to generate an income (in which case you’d choose income generating funds, denoted by the term “Inc”) or want to grow your initial investment (where you’d need accumulation funds, denoted by the term “Acc”).
You need to make sure you’re comfortable with the level of risk involved, as well as the long-term nature of equity ISAs. There’s no guarantee with this kind of investment and you may get back less than you put in, so despite the potential to secure better returns than with a traditional savings account, it’s important to weigh up this factor.
It’s only really suitable if you're willing to commit your money to an account for the long-term, too, as this will offer the best scenario for growth. While most funds can be sold at relatively short notice, this type of account won't be good for those who may need to dip into their savings in an emergency, so make sure you view it as a longer-term undertaking.
You’ll also want to remember that, even though your investments will essentially be held in a tax-free account, there could still be certain tax payments and fund charges applicable. Equity ISAs are exempt from income and capital gains tax, while the taxation of dividends changed in April 2016, so that dividends are also paid free of tax if held within an ISA. However, these ISAs will usually charge fees, so always check the small print to see if the particular account is worth it.
Any investment comes with an element of risk, particularly those with the prospect of higher returns, and it's important for any potential investor to understand them. Over time there could well be fluctuations in the value of an investment with the total value and any income generated going down as well as up, and in a volatile market some investors may get back less than they put in.
Different types of investment fund have different levels of risk – or to put it another way, they will be more volatile. For example, funds investing in smaller companies or emerging markets will be more volatile than funds that invest in UK blue chip firms. Also, growth funds investing in shares are more likely to be more volatile than funds investing in fixed interest investments such as Government gilts or corporate bonds.
It is usually a good idea to invest across a range of investment types (or asset classes) such as shares, bonds, property and cash to spread your risk. How much you invest in each category will depend on how much risk you are prepared to take, and how long you intend to invest for. Whatever you chose, please note that past performance should never be seen as an indicator of future returns.
Disclaimer: This is a basic guide to stocks & shares ISAs. It does not cover every circumstance and nor is it intended to be a source of advice. This information is aimed at customers within the UK. Tax treatment depends on your individual circumstances and may be subject to change.
Please send me emails with the latest Moneyfacts news, best buy products and specially selected third party offers
Inflation remained unchanged in August, official figures have revealed, with the measure of CPI stan... More
Many parents like to set up a savings account for their newborn, giving them a valuable nest egg for... More
Nearly half of England could become a Help to Buy ISA no-go zone by spring 2017, due to the rising c... More
The dramatic fall of savings rates in recent weeks has only added to the pain that many savers are e... More
Cash ISAs have long been the savings account of choice for many consumers, but the dramatic rate cut... More
Cash ISAs are a special type of savings account that pay interest tax-free. Each tax year you get an... More
Download your FREE Guide to ISA allowances for the 2015-16 tax year. Find out everything you need t... More
Cash ISA transfers can allow you to get a better interest rate and bring your ISAs together in one p... More
Aldermore has amended rates across its range of fixed savings products. Despite this, its two-year f... More
Bank of Cyprus has amended rates on its range of fixed rate products. Despite this, their one- and t... More
Ipswich Building Society has introduced a new ISA for existing or local savers, which has earned an ... More
Buckinghamshire Building Society has launched a new five-year fixed ISA onto the market, which has a... More
Yorkshire Bank has re-introduced a competitive 18-month fixed rate cash ISA to the market, immediate... More
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.