FTSE Tracker ISA

What are FTSE tracker ISAs

Tracker ISAs, also known as tracker funds or passive investments, are ISAs that are closely determined by the performance of the world’s biggest economic market indices such as the FTSE, Dow Jones or Nasdaq.

A FTSE tracker ISA is a tracker ISA that is closely linked to the FTSE 100 index. 

The FTSE tracks the share prices of the 100 largest companies listed on the London Stock Exchange and is widely recognised as the proxy benchmark for most investment managers

Why invest through an ISA

The biggest reason to consider a FTSE tracker ISA is because of the effect of tax on investments.

Any regular investment that you make will be subject to tax, meaning that any return you receive from an investment will be reduced by a certain percentage.

FTSE tracker ISAs give you the opportunity to invest a substantial amount of capital into an investment and receive up to an agreed tax-free interest limit set by the government. 

The tax-free interest ISA allowance for 2021-22 is £20,000; however, this will change in the near future.

The FTSE tracker ISAs’ ability to provide up to £20,000 tax-free interest makes it well-suited for making investments into stocks, shares or trusts.

Not only do FTSE tracker ISAs give you tax-free interest, but they can save you time and hassle in the long run.

This is because you do not have to complete a self-assessment form upon receipt of your returns.

Eligibility

To qualify for a tracker ISA you need to be:

• Aged 18 years or over
• A UK resident and tax payer