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27th
Mar 2020
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How Can I Get ‘Income’ From My ISA?

How Can I Get ‘Income’ From My ISA?

With the ISA deadline a little over a week and a bit away, many Britons are looking to make the most of their ISA allowance before the end of the tax year. So how can you use your ISA allowance to gain monthly income? We've got the answers in our daily ISA blog today. 

What’s a High Income ISA?

A high-income ISA is a particular way for you to use your ISA allowance to receive regular tax-efficient returns payments on either your investments, or savings.

These will ideally give you the highest possible income from your ISA.

This combines the benefit of a high-income investment with the straightforward tax-free nature of ISAs.

When will I be paid?

This income an be paid every:

  • six months
  • every year
  • or every quarter

Depending on the account and the provider, you’ll have the choice when setting up your account what suits you.

This way you can have a regular ‘income’ from your account, which can be a useful supplication to your wages.

What options do I have with a High Income ISA?

There are a variety of high-income ISA accounts available from multiple providers. As with any ISA, it’s important to shop around to find the best account and provider which fits your situation and income goals.

You can choose income funds from all over the world, with different risk profiles and growth objectives. Some examples include:

  • Equity funds
  • Bong funds
  • Property funds
  • Specialist funds
  • Cash funds

Is there a limit?

The limit you put into your account is the same as the yearly limit for the ISA. You can put up to £20,000 per tax year into an ISA account (per person) so this is the total amount you can put into an ISA for this tax year – 2019/2020. It was recently announced that this ISA allowance will remain the same for tax year 2020/2021.

Is a high-income ISA right for me?

A high income ISA might be right for you if…

  • you’re not keen on the low interest rates offered by a standard Cash ISA
  • you’re saving for a long-term goal, such a retirement as these can provide you with ‘income’ during retirement
  • you’re looking to open a particularly high-return stocks and shares ISA account

It might not be right for you if you are focused on short term savings; in which case a Cash ISA or a Fixed Term ISA might be right for you.

Read more about High Income ISAs. 

Investment Fund ISAs

Managed Monthly Income Trust ISA

from Legal & General

Income Yield 2.00% pa - Interest Payable Monthly*

Why we like it: The Legal & General Managed Monthly Income Trust is designed for investors looking for income or growth from an investment in bonds. To see more information about this fund go to the L&G website and select "Pick your Own Funds". You can invest up to £20,000 this tax year, with a low minimum of £100 lump sum or £20 per month, and you can manage your account easily online. 

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.

*Underlying yield as at June 2019

Selected ISAs

Fixed Income ISA

from Investec

Allows ISA Transfers
Interest Rate (AER) 4.26% fixed income
  • Counterparty: Investec Bank plc
  • Term: 5 years
  • Protection Scheme: FSCS
  • Invest From: £3,000
  • 4.26% income paid regardless of the performance of the FTSE 100
  • Monthly income
  • Capital is at risk if the FTSE 100 Index falls by more than 40% at maturity, in which case your initial investment will reduce by 1% for each 1% fall
  • An arrangement fee applies for 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. There is a risk of losing some or all of your initial investment due to the performance of the underlying investment. 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.

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

New (tax) Year, New You: How to Make the Most of Your ISAs in 2020/2021

6th April 2020

Dawn breaks on the morning of April 6th 2020 – the sun is (potentially shining) and the new tax year has begun. With £20,000 of possibilities for your tax allowance for this new tax year – we’ve answered the most common questions that savers have at this stage. 

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