JamesCaldwell

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Tax-Efficient Saving

Welcome to ISA.co.uk, your online destination for ISA information. 

Remember - you only have until 5th April 2015 to make use of your 2014/15 ISA allowance. You can invest up to £11,880 per person and shelter your savings from the taxman today!

 

James Caldwell, Director

Cash ISA Selection
ProviderPlan NameDeposit TakerISA OptionTermMaximum Potential ReturnMore Info

Target Income Deposit PlanInvestec Bank plcyes6 years4.75%
per annum
More Info >
  • Potential annual income of 4.75%
  • Income paid if the FTSE 100 finishes above 90% of its starting value
  • Missed payments added to future payment next time anniversary level above 90%
  • Capital protected
  • Medium/long term alternative to fixed rates
  • Also available for Cash ISA & Cash ISA transfers
  • Covered by the FSCS (Financial Services Compensation Scheme)
  • Limited offer - deadlines apply. May close early if oversubscribed
  • Plan designed to be held for full term
  • Arrangement fee applies
  • Returns not guaranteed. You may only receive a return of your original capital

5 Year Deposit Plus PlanInvestec Bank plcyes5 years27.5% fixed or 100% of FTSE 100 growth (no limit)More Info >
  • Target return of 27.5% gross or 100% of any growth in the Index if higher
  • Capital protected
  • Low minimum - £3,000
  • Short/medium alternative to fixed rates
  • Also available for Cash ISA & Cash ISA Transfers
  • Covered by the FSCS (Financial Services Compensation Scheme)
  • Limited offer - deadlines apply. May close early if oversubscribed
  • Plan designed to be held for full term
  • Arrangement fee applies
  • Returns not guaranteed. You may only recieve a return of your original capital
Important Information: Structured deposits offer you the potential to earn higher returns than you would with a regular savings account. Your returns are based on the performance of an index or commodity. If the investment does not perform well you may receive no income or capital growth, but you can be confident that your capital will be repaid. You have no access to your deposit during the term of the account, typically 3 to 6 years but your original capital will be repaid in full at the end of the term. In the event that the deposit taker is unable to repay your initial investment and any returns stated you may be entitled to compensation from the Financial Services Compensation Scheme (FSCS) depending on your individual circumstances.
Instant Access Cash ISA Selection
Fund ManagerAccountRateTermMore Info

E-Cash ISA 21.00%Instant AccessMore Info >
  • No bonus included in the rate
  • No notice period or loss of interest for withdrawals
  • Transfers accepted
  • Minimum balance £10
  • Access – online, telephone and post
  • Covered by the FSCS (Financial Services Compensation Scheme)
  • Must be 16 or older
  • Annual interest
  • Variable interest rate

Natwest Instant Access Cash ISA<h4>Up to</h4> 1.50%Instant AccessMore Info >
  • Earn 1.50% AER (variable) on balances below £25,000 (1.00% AER (variable) on balances below £25,000)
  • Transfers allowed in – bring all your cash ISAs together in one place
  • Instant access – manage your account by phone, in-branch and online
  • Tax free interest means interest payable is exempt from UK income tax
  • Must be 16 or over
  • Must be a UK resident

RBS Instant Access Cash ISA<h4>Up to</h4> 1.50%Instant AccessMore Info >
  • Earn 1.50% AER (variable) on balances below £25,000 (1.00% AER (variable) on balances below £25,000)
  • Transfers allowed in – bring all your cash ISAs together in one place
  • Instant access – manage your account by phone, in-branch and online
  • Tax free interest means interest payable is exempt from UK income tax
  • Must be 16 or over
  • Must be a UK resident
Fixed Rate Cash ISA Selection
Fund ManagerAccountRateTermMore Info

3 Year Fixed Rate Cash ISA2.00%3 YearMore Info >
  • Manage your account online, by phone or post
  • Withdraw cash early if you need to (subject to loss of interest)
  • Transfer from other cash ISA providers
  • Covered by the FSCS (Financial Services Compensation Scheme)
  • Must be UK resident and aged 18 or older
  • Minimum opening balance of £1,000

2 Year Fixed Rate Cash ISA1.80%2 YearMore Info >
  • Manage your account online, by phone or post
  • Withdraw cash early if you need to (subject to loss of interest)
  • Transfer from other cash ISA providers
  • Covered by the FSCS (Financial Services Compensation Scheme)
  • Must be UK resident and aged 18 or older
  • Minimum opening balance of £1,000

1 Year Fixed Rate Cash ISA1.60%1 YearMore Info >
  • Manage your account online, by phone or post
  • Withdraw cash early if you need to (subject to loss of interest)
  • Transfer from other cash ISA providers
  • Covered by the FSCS (Financial Services Compensation Scheme)
  • Must be UK resident and aged 18 or older
  • Minimum opening balance of £1,000
Growth Investment ISA Selection
ProviderPlan NameCounterpartyISA OptionTermMaximum Potential ReturnMore Info

FTSE 4 Defensive Autocall PlanCredit Suisse AGyesUp to
6 years
13.5%
per annum
More Info >
  • 13.5% for each year (not compounded) provided four FTSE 100 stocks finish equal to or higher than the required kick out level
  • Potential to mature early every year, from year 1 onwards
  • Kick out level reduces from 95% to 65% over the term
  • Available for ISA, ISA transfer and direct investment
  • Investment deadline ISA transfers - 11 April March 2014
  • Investment deadline for 2013/14 and ISA by cheque or bank transfer - 4 April 2014
  • Investment deadline for direct and 2014/15 ISA by cheque or bank transfer - 23 April 2014
  • Capital is at risk if one or more stocks has fallen by more than 50% at maturity from their starting value, in which case your initial investment will reduce by 1% for each 1% fall of the lowest performing stock
  • Minimum investment £5,000
  • An arrangement fee applies to this plan
  • Product designed to be held for the full term

FTSE 4 FTSE 100 Autocall PlanBNP ParibasyesUp to
6 years
12%
per annum
More Info >
  • 3% for each quarter (not compounded) provided four of the largest FTSE 100 companies share prices finish equal to or higher than their starting value
  • Potential to mature early, from quarter 4 onwards
  • Kick out level reduces to 75% at the end of year 6
  • Available for ISA, ISA transfer and direct investment
  • Investment deadline ISA transfers - 22 April 2014
  • Investment deadline for 2013/14 ISA by cheuqe or bank transfer - 4 April 2014
  • Investment deadline for direct and 2014/15 ISA by cheque or bank transfer - 2 May 2014
  • Capital is at risk if the FTSE 100 Index has fallen by more than 40% at maturity from its starting value, in which case your initial investment will reduce by 1% for each 1% fall
  • Minimum investment £5,000
  • An arrangement fee applies to this plan
  • Product designed to be held for the full term
Important Information: Structured investment plans are not capital protected and are not covered by the Financial Services Compensation Scheme (FSCS) for default alone. Income and growth returns are not guaranteed. There is a risk of losing some or all of your initial investment due to the performance of the underlying Index or commodity. There is also a risk that the company backing the plan known as the Counterparty may be unable to repay your initial investment and any returns stated.

Why should you use your ISA Allowance in 2014?


An individual savings account, or ISA for short, is a way of saving money in a tax-efficient way.

It's a fact that most of us in the UK, and particularly the younger generation, are not saving enough. Recent economic pressures have led many people to see saving as a luxury, but whatever our circumstances we should all get into the habit of saving some of our income, and an ISA is one way to do this.  

 

How do ISAs work?


ISAs are not investments in themselves - instead, they act as tax 'shelters', protecting your cash or investments from tax. There are two basic types of ISA:

  • Cash ISA - Under the 2014/15 ISA Allowance of £11,880, which starts 6th April 2014, individuals are permitted to save up to £5,940 in a cash ISA. With a cash ISA, money is placed on deposit and all interest is paid gross without any tax having been deducted. Money can be paid into a cash ISA as a lump sum or in regular amounts.
  • Stocks and shares ISA - Under the 2014/15 ISA allowance, up to £11,880 can be invested. This covers investments in shares, unit trusts, investment trusts, open-ended investment companies, life insurance policies, corporate bonds and gilts. Money can be paid into a stocks and shares ISA as a lump sum or in regular amounts.

Within the terms of the 2014/15 ISA allowance, you can put £5,940 into a cash ISA and the remaining balance into a stocks and shares ISA. If, at a later date, you decide that you want to transfer your cash ISA into a stocks and shares ISA, this is permitted. However, it's important to be aware that this only works one way - you can't transfer your stocks and shares ISA balance into a cash ISA.

 

Frequently asked questions about ISAs



Which type of ISA is right for me?

This will depend on your saving objectives and your attitude to risk. With cash ISAs, you have the security of knowing that your deposited capital is protected, but the caveat is that you may find your potential for earning interest is limited - particularly if you need instant access to your money. If you're prepared to tie up some money in a cash ISA for a fixed period of time, you may be able to glean slightly more interest. With stocks and shares ISAs you need to be comfortable with investment risk, as your underlying capital is not guaranteed and there's always the chance that it may go down in value. This risk may be balanced out if you are investing for the long term, as stocks and shares ISAs will generally outperform their cash counterparts.


How many ISAs can I have?

There are limits on the number of ISAs you can subscribe to each tax year. Current ISA rules allow each individual to have one cash ISA and one stocks and shares ISA per tax year.


How much can I save in an ISA?

With an ISA you have the option to either save on a regular basis or invest an initial lump sum up to the maximum ISA allowance, which is set every year by HMRC. The allowance for 2013/14 is £11,520 and the allowance for 2014/15 from 6th April 2014 is £11,880. Of this allowance, up to half can be placed in a cash ISA, while the remainder can be placed in a stocks and shares ISA. Savers also have the option to place their entire ISA allowance in a stocks and shares ISA.

Saving is a habit, so commit to saving a minimum amount that you can afford every month. With a cash ISA you can save up to £5,940 per year from 6th April 2014, and most providers will allow you to start saving from as little as £1 (although some will pay better rates of interest for higher contributions). For stocks and shares ISAs you can invest your full ISA allowance per year, and many providers allow you to invest from £25 per month minimum.


How can inflation affect ISAs?

It's important to bear in mind that if the rate of inflation is running higher than the interest you are receiving within your cash ISA then your money will depreciate in real terms.


What are the tax benefits of an ISA?

With a cash ISA it's simple - no tax will be deducted from your allowance. With a stocks and shares ISA, you still pay some tax, but you pay substantially less that you would otherwise. If you are a basic rate taxpayer, you pay tax at 10% on dividend income. This is taken as a 'tax credit' before your receive the dividend and is not refunded for ISA investments. For higher rate taxpayers dividend income is normally subject to tax at 32.5%, but within an ISA, apart from the 10% 'tax credit', there's no further tax to pay. As an additional benefit, all capital gains within an ISA are free from capital gains taxation.


What if I need to get my money out of an ISA quickly?

It depends on the terms and conditions of the ISA you have taken out. With most cash ISAs you can withdraw money without losing any tax benefits already built up. However, with some accounts, you may lose interest if you withdraw money early. Some cash ISA plans are designed for the money to be held for a set period. With investment ISAs there may be withdrawal charges, so always check the terms and conditions before committing to anything.


Can I transfer an ISA?

Many ISA providers will accept ISA transfers from other providers, although you should check to make sure that you understand the timescales involved for transfer. Some providers can be a bit slow in instigating the transfers. This means that if you're not happy with how your ISA is performing you have the option of voting with your feet. You can move your money if your existing ISA provider becomes uncompetitive and you find that you can get a better rate of interest elsewhere. This is especially true for cash ISAs. For stocks and shares ISAs the same principle applies, although with these types of investments you should take the long view on performance and not necessarily move your ISA on the basis of a less-than-stellar short-term investment performance. For more information, see ISA transfers.


What charges might I be expected to pay on an ISA?

This will depend on the individual ISA provider, so check with them for any charges applied for withdrawals or transfers, or if you need to access your money early.


Can I take out an ISA for my child?

In November 2011 the UK government launched Junior ISAs for children born after 2nd Jan 2011 or before 1st September 2002. For children born between these dates, junior ISAS are not available, as they will have received between £50 and £500 from the government to be invested into Child Trust Funds. With a junior ISA, a parent can invest up to £3,720 per tax year on behalf of each child. The money can only be accessed once the beneficiary turns 18, so it's a practical way to save for your child's future.

 

When were ISAs introduced and how have they been received? 


Individual Savings Accounts (ISAs) were introduced in the UK in 1999, replacing Personal Equity Plans (PEPs) and Tax-Exempt Special Savings Schemes (TESSAs) as a simplified savings model for people aged 16 and over. The current ISA market is estimated to be worth over £400 billion. According to TISA (the Tax Incentivised Savings Association), ISAs are now established as a core savings product for 42% of UK households.

In the tax year 2010/11, figures from the Office of National Statistics showed that people in the UK put more money into ISAs than they put into pensions. Approximately £15.8 billion was placed in stocks and shares ISAs and around £38 billion went into cash ISAs. Meanwhile, pension contributions in the same tax year amounted to approximately £14.2 billion.

Important Risk Information:

This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.

Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.

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