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23rd
Oct 2020
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What ISA Options Do I Have?

What ISA Options Do I Have?

There is a lot of variety when it comes to the types of ISAs account; it can be overwhelming when looking to choose which one you think is right for you. Cash ISAs, Investment ISAs, Lifetime ISAs, Peer to Peer ISAs, Junior ISAs...with such a wealth of choice, which ISA is right for you? We've broken down all of your ISA options to give you the information you need to know. 

There are lots of different types of ISAs including:

Firstly, we’ll explain what each of these ISAs are, and how they can help you towards your savings goals. 

Then, in our second blog in this 'series', we’ll explain some of the ‘sub types’ of ISAs which fit under some of these ISA types which are more specific, so you can get a full picture of your options.

What's an ISA?

An ISA is a tax-efficient way for you to make your money work; by putting your money into an ISA tax-free wrapper, you will enjoy returns which are safe from the tax man.

For this tax year, you are able to put in a maximum of £20,000 into an ISA.

Cash ISA

A Cash ISA is a bit like a savings account, but with a better interest rate. A Cash ISA is an type of ISA where your money is kept in the ISA wrapper and gathers interest.

This interest is protected from the tax man because it is kept in the ISA wrapper; any returns you gain from the interest are not subject to capital gains tax or income tax.

Cash ISAs historically have quite low interest rates, so can sometimes be a bit unattractive to people looking to get a good return. However, for the right saver there are lots of pros to having a Cash ISA which should be considered. Read our blog “Is A Cash ISA Worthwhile?” here, so find out if it’s right for you. https://www.isa.co.uk/isa-blog/posts/2020/march/4/is-a-cash-isa-worthwhile-/

Investment ISA

An Investment ISA does essentially what it says on the tin: it is a way to invest while keeping your money within the tax free ISA wrapper. It can also be known as a Stocks and Shares ISA, which is a good way to explain how they work. These are generally interchangeable terms, though they have slightly different meanings:

“shares” can refer to owning part of one particular company (“I own shares in Unilever”)

“stocks” can refer to shares in a number of different companies (“I own stocks in the renewable energy industry”)

With an Investment ISA, you will gain returns on your investment which will be safe from the tax man. They tend to offer better return rates than Cash ISAs and allow you to invest easily and with access to specific types of investments, such as Ethical ISAs or Climate Change ISAs.

Lifetime ISA

A Lifetime ISA is an ISA with a very specific purpose - long term saving.

You can but in up to £4000 per tax year; this amount is subject to government legislation, and this is the allowance for 2020/2021. The catch with this account is that you can only access your money when you are either buying your first home, or you have reached the age of 55 and retiring.

The government will then give you a 'bonus' of 25% of what you have put into this account: which means you can get a boost of up to £1000 each year. This money can only be used to help you buy your first home or as long-term retirement savings. You can theoretically take this money out of these accounts, however you will lose the bonus and potentially be subject to penalties.

Peer to Peer ISA

A Peer to Peer ISA, otherwise known as Innovative ISAs, allow savers to lend their money to other borrowers directly - bypassing the middle-man and thus, benefiting from a better interest return.

This type of account is best suited to those who are experienced investors – and therefore, familiar with the process – and are comfortable with a slightly higher associated risk.

These accounts offer the potential for higher return rates, so are attractive for those who already know what they’re doing when it comes to investing.

Junior ISA

A Junior ISA, or JISA, is an ISA account which is set up on behalf of a child by a parent or guardian. Family, friends and parents can then put money into that ISA. This is an excellent way for parents, grandparents, friend etc. to put money aside into a specified account designed to help a child have a strong financial basis to start their adult life.

The child whose name is on the account will be able to manage the money when they turn 16 but will not be able to access the cash until they are 18.

These accounts are subject to an additional government legislation – you can put in a maximum of £9000 this tax year into a JISA account. 

Read more about Cash ISAs 

Read more about Investment ISAs

Read more about Lifetime ISAs

Read more about Peer to Peer ISAs

Read more about Junior ISAs

Investment Fund Supermarket ISAs

Stocks & Shares ISA

from Fidelity

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Choose from over 4,000 investment options, including one of the widest fund ranges in the UK, plus shares, investment trusts and exchange-traded funds. There’s also expert guidance to help with your investment decisions, which includes a selection of tools and insights from Fidelity’s experts. Capital at risk. Tax and ISA rules apply.
  • Invest From: £25 through regular savings or £1,000 lump sum

Why we like it: Fidelity has lots of investment options, plus an extensive range of guidance tools to help you decide what to invest in. Their award-winning ISA is easy to start and offers great value, their a typical service fee of just 0.35%. Other ongoing charges apply. On top of that, everything is backed by Fidelity’s 50 years of investment experience.

Important: The value of investments can go down as well as up so you may get back less than you invest. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.

Tax treatment depends on individual circumstances and all tax rules may change in the future.

Stocks & Shares ISA

from Hargreaves Lansdown

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Choose from over 2,500 funds, shares, investment trusts and more to build your portfolio. UK and overseas shares. Corporate and government bonds. Exchange Traded Funds (ETFs). Ready-made portfolios to suit your goals and attitude to risk from £1,000. Expert research to help make your decisions. Investment trusts and much more. Capital at risk.Tax & ISA rules apply
  • Invest From: £25 pm or from £100 lump sum

Why we like it: Choose your own funds or alternatively a ready made portfolio. Market-beating savings and discounts of up to 5.5%. No charge to buy and sell funds. Low, tiered annual charges for holding funds, with a maximum of just 0.45% per annum. Free fund updates and analysis from experienced research team. Invest with a financially secure, FTSE 100 company.

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.

Junior ISAs

Junior Stocks and Shares ISA

from Hargreaves Lansdown

Regular Savings
  • Investment Options: Invest from £25 per month or deposits of £100.

Why we like it: Invest for your child from £25 pm tax free. A wide range of top performing funds to choose from. The annual charge for holding investments in a Hargreaves Lansdown Junior ISA is never more than 0.45%. Your dealing and other charges will depend on the investments you choose.

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.

Lifetime ISAs

Lifetime ISA

from AJ Bell

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Over 2,000 Funds, Shares and ETF's
  • Invest From: £25 per month
  • Trade From (frequent trader rate): £4.95
  • Trade From (standard trader rate): £9.95

Why we like it: Start from £25 per month and save up to £4,000 per year. Wide choice of stock market linked investments, or utilise online investment ideas. Can be retained in cash. Simple annual management fee of 0.25%. Deal from £1.50 and never pay more than £9.95 per online deal. AJ Bell are regulated by the Financial Conduct Authority and are covered by the Financial Services Compensation Scheme. Capital at risk. AJ Bell Youinvest doesn’t offer advice.

  • Select your own investments, access fund options, or choose investment ideas where specialists do the hard work for you
  • Access your account online 24/7 and deal on the go with the mobile app
  • UK-based customer services team, webchat and email support
  • Open with lump sum, regular contributions or transfers from existing ISA's
  • Contribute up to £4,000 per year until you’re 50
  • Get a 25% government bonus: For every £4 you pay in you receive a £1 bonus
  • Use your savings to buy your first home up to a value of £450,000, or use as retirement income from aged 60
  • You can contribute to both a stocks and shares Lifetime ISA and a ‘regular’ stocks and shares ISA in the same tax year
  • Must be UK resident aged 18-39 to open
  • If you need to access your money for any other reason, you’ll pay a 20% penalty (25% from 6 April 2021)
  • Annual account charge of 0.25%
  • Dealing and other charges will depend on the investments you choose and will apply in addition to an annual account charge
  • Tax rules can change and their benefits depend on your circumstances. Lifetime ISA allowance forms part of the overall £20,000 annual ISA allowance
  • Tax and Lifetime ISA rules apply
  • If you choose to save in a LISA instead of enrolling in, or contributing to, your workplace pension you will miss out on the benefit of your employer’s contributions to that scheme and your current and future entitlement to means tested benefits may be affected
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

5 Considerations for Your Next Investment ISA

15th March 2021

You've decided to invest your savings into a Stocks and Shares ISA. You'll be using your tax-free ISA allowance for this year before the deadline, while also investing your money for your future. But what do you need to consider before opening an account? We've put together a list of our top five considerations for you to think about before you click "apply". 

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ISA.co.uk is a trading style of Fair Investment Company.

We've been comparing and recommending ISAs for many years so you can trust you're in good hands.

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