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29th
Jul 2020
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Is An Investment ISA a Good Idea?

Is An Investment ISA a Good Idea?

If you're new to investing you will have come across the term "Investment ISA" or "Stocks and Shares ISA" which are ISA accounts designed specifically designed to maximise tax-free returns on your investments. But are these a good idea? 

An Investment ISA (also known as a Stocks and Shares ISA) is a great way to start for both first-time investors and seasoned investors alike. 

An Individual Savings Account (ISA) is a tax-efficient way of making your savings work for you in the best way possible. There are lots of different kinds of ISAs, but for the sake of this blog we will be focussing on Investment ISAs (also known as a Stocks and Shares ISA).

So…how do they work?

An Investment ISA does what it says on the tin: your money will be put to work in an investment (as the name would suggest). 

Those investments should put your money into various stocks and shares, which should garner returns for you. 

And - because it is an ISA, Government legislation means that any returns earned on your investments are tax-free.

You can choose between having an actively managed fund or a passively managed fund, depending on your preference.

What are the benefits of an Investment ISA?

Here are a few reasons why we think that getting an Investment ISA is a good idea: 

They're tax-free

The main benefit to an Investment ISA is that it is tax-free. 

If you're wanting to get into Investments, then you should really consider opening an ISA as it is the most tax-efficient way of investing. 

Each year, every British adult has a set amount legislated by the Government which allows each individual to put £20,000 into an ISA. You could choose to either put this total amount into an Investment ISA, or spread it across the other kinds of ISAs. 

Variety

There is also a lot of variety with an Investment ISA - there is a wide variety of platforms, and within them, lots of different funds which you can choose from. A few example of different types of Investment ISAs include:

Widely Available 

They're also widely available from many different platforms. You can get an Investment ISA from: 

  • Banks
  • Building societies
  • Financial Services Companies
  • Credit Unions
  • Friendly societies
  • Peer to peer lending services
  • Crowdfunding companies

But remember...

...because it is an investment, the stock market could go down as well as up, so you could end up losing money on your investment. 

There are some Investment ISAs which are much lower risk than others, but these tend to produce lower yields. It’s important to evaluate your attitude towards risk before opening an Investment ISA. 

If you are very risk-averse, then you might want to consider opening a Cash ISA instead. These tend to have lower returns, however are far lower risk. 

Investment Fund Supermarket ISAs

Interative Investor Stocks & Shares ISA

from Interactive Investor

Allows ISA Transfers
  • Protection Scheme: FSCS
  • Fund Choice: 40,000+ UK and global investments
  • Invest From: £25 pm or £100 single

Why we like it: An award-winning ISA that gives you complete control. The second largest platform in the UK with the widest choice of investment options in the market including funds, investment trusts, ETF’s and more. Open online in less than 10 minutes. Access to expert independent ideas and analysis. Low cost fees and trading.

Important: The value of your investments can rise as well as fall. You may get back less than you invested. If you’re unsure, we recommend you ask for independent advice.

Vantage Stocks & Shares ISA

from Hargreaves Lansdown

Allows ISA Transfers
  • Protection Scheme: FSCS
  • Fund Choice: 2,500+ Funds
  • Invest From: £25 pm

Why we like it: Shelter up to £20,000 this tax year with the low cost, award-winning ISA. The UK's number 1 platform for private investors. 

Important: The value of your investments can rise as well as fall. You may get back less than you invested. If you’re unsure, we recommend you ask for independent advice.

Stocks & Shares ISA

from Fidelity

Allows ISA Transfers
  • Protection Scheme: FSCS
  • Fund Choice: 2,000+ Funds
  • Invest From: £50pm

Why we like it: Invest from as little as £50 a month or with a £1,000 lump sum. Investment choice from over 100 fund providers, giving you access to 2,000+ funds. One low-cost service fee of 0.35%*. Great service – from investment guidance on website through to UK-based phones team. PathFinder, Select 50, Investment Finder - investing tools for beginners to advanced investors. 24/7 access via online Account Management system.

* depending on how much you have invested

Important: Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice.

High Income ISAs

High income ISA ideas:

ISAs Products

Cash ISAs

Fixed Rate & Instant Access ISAs:

Cash ISAs: 

Stocks & Shares ISAs

Types of Stocks and Shares ISA include: 

Stocks and Shares ISAs

Latest News

Investment ISA Pros and Cons

7th August 2020

The tax-free returns offered by an Investment ISA (otherwise known as a Stocks and Shares ISA) can be very tempting at first glance - however, as with any investment, it is important to weigh up the pros and cons. So we've put together a list of what you need to consider before opening your own Stocks and Shares ISA account. 

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