What is an ISA – stocks and shares?

An Individual Savings Account (ISA) allows you to save or invest a limited amount of money every tax year.  An investment ISA invests your money in stocks and shares or investment funds, as well as some cash, if you’d prefer.  The main benefit of this type of investment is that the proceeds potentially grow almost tax free and, possibly more importantly, could also provide a tax free income when required.  As someone in the millionaire asset group, for the 2009/10 year you may invest £10,200 in a Fund ISA.  The interest and returns from ISAs are almost tax free, but this does not make them suitable for everyone.

If you are a wealthy retired client, seek tax advice as the value may be liable to inheritance tax.  For most other people, they are usually suitable provided you already have an emergency fund.  As always, a good financial plan and financial advice are essential.

Which are the best ISAs?

There is no such thing as a best ISA.  As markets change, so does the performance of funds held in your ISA.  You and your independent financial adviser should regularly review your investment portfolio, monitoring performance, the fees being charged and that the spread of investments (within your ISA account), continues to match the investment risks you’re willing to take.

Before investing in an ISA, you should seek independent financial advice to ascertain if this tax wrapper is best for you.  If you are wealthy retired or a small business owner then more suitable alternatives may be open to you.

Still have some questions which are the best ISAs?

If you have any questions please call us on 01582 839280 or Email us.