skip to main content
8th
Jan 2021
/

What types of ISA are there?

What types of ISA are there?

s are a first port of call for UK savers however there are different types. We explore the different s available.

What types of ISA are there?

Individual Savings Accounts (ISAs) are the principal method of tax-efficient savings in the UK, and there are several different types to choose from.

Cash ISAs

These are essentially deposit accounts, and they have declined in popularity in recent years. Interest rates are at all-time lows and basic rate taxpayers are now able to earn up to £1,000 interest per year free of tax without using an ISA in any case.

Cash ISAs in one sense provide a risk-free method of saving, in that the account balance is guaranteed not to fall. However, given today’s ultra-low interest rates, there is still the risk that any gains will be lower than inflation, resulting in a loss in real terms.

Stocks & Shares ISA

There is a huge range of different investment options here.

Your stocks & shares ISA monies can be invested in areas such as:

  • Government and corporate bonds
  • Directly into company shares
  • Unit trusts
  • Investment trusts
  • Open ended investment companies

It’s also possible to focus your investment according to your personal wishes, so you might seek out investment funds that focus on companies in a particular geographical area, or a particular business sector.

Other people simply opt for investments that track well-known stock market indices, or they choose ‘ready-made portfolios’, where they let the experts pick the investments on their behalf.

All stock market-based investments carry a degree of risk, so the value of your investment can fall as well as rise. However, some stocks & shares options are riskier than others, and a skilled financial adviser can help you identify how much risk you can afford to take.

fundsupermarket is a good way to invest in a stocks and shares ISA providing an extensive range of options.

Innovative Finance ISA

This ISA allows you to invest in the peer-to-peer lending market. Your contributions will be lent directly to individual borrowers and businesses and the borrowers then pay back the borrowed amount, with added interest.

Despite the addition of interest in this way, don’t be tempted to see innovative finance ISAs as being like cash ISAs, only with better returns.

There is the risk that the borrowers could default on their repayments. Unlike other forms of ISA, these investments are not protected by the Financial Services Compensation Scheme should your provider cease trading.

Providers should only promote these ISAs to high net worth or sophisticated investors, given their complexity.

Lifetime ISA

Lifetime ISAs can be opened by those aged between 18 and 39, and contributions can continue until a person’s 50th birthday. It is designed to be used to save for the purchase of a first home, or for retirement purposes. 

Contributions can be invested in cash, stocks & shares or a combination of the two. You can access the account when you are ready to purchase a home, or when you reach age 60.

Help To Buy ISA

This is a type of cash ISA to assist first-time buyers saving towards the costs of buying a home. It is no longer possible to open a new account, but contributions can still be made to existing accounts.

Junior ISA

Junior ISAs can be opened in the name of any person under the age of 18. 

The account must be opened by their parent or legal guardian, after which anyone can make contributions to the account on behalf of the child. Contributions can be invested in cash, stocks & shares or a combination of the two. 

The current junior ISA allowance is £9,000 per child.

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 Interactive Investor

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Access 40,000+ UK, US and international shares on 17 global exchanges. Choose from over 3,000 funds or select a ready made portfolio. Investment trusts, ETFs, Bonds & Gilts. Option to invest in 6 low cost funds selected by experts to get you started. Capital at risk. Tax & ISA rules apply
  • Invest From: £25 a month or any lump sum

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. Strong ethical investment proposition with more than 140 investment options. 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.

Model Portfolio ISA

from Moneyfarm

Allows ISA Transfers
  • Protection Scheme: FSCS
  • Fund Choice: Choose your risk profile and have it matched to an investment portfolio expertly built and managed using exchange traded funds (ETFs)
  • Invest From: £1,500

Why we like it: Answer questions about your goals, financial situation and attitude to risk, and Moneyfarm will recommend the right ISA portfolio for you, built and managed by experts to help your money grow. You’ll always be invested in a portfolio that’s suitable for you, and you can manage this through the Advice Centre. See what you’re invested in, how you’re performing and how much you’re paying anywhere and any time with the Moneyfarm app. Add money to your ISA by setting up a direct debit, investing a lump-sum, or by transferring old ISAs for free

Model Portfolio ISA

from AJ Bell

Allows ISA Transfers
  • Protection Scheme: FSCS
  • Fund Choice: Choose the fund that suits you. There are eight in total, each built by our specialist team at AJ Bell Investments.
  • Invest From: £25 pm

Why we like it: The ‘no-hassle’ option – just choose your fund and how much to invest. That’s it. They do everything else from there, including managing and rebalancing the fund whenever they think it’s necessary.

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 Hargreaves Lansdown

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Over 2,500 Funds, Investment Trusts, Bonds, ETF's or Cash
  • Invest From: £100 single or £25 per month

Why we like it: Easy set up in a matter of minutes. Start with as little as £25 and save up to £4,000 per year. Wide choice of stock market linked investments, or can be retained in cash. Fund factsheets and investment tools available. Simple annual management fee of 0.45%. There may be some other charges depending on the investment choices. Hargreaves Lansdown are regulated by the Financial Conduct Authority and are covered by the Financial Services Compensation Scheme. Capital at risk.

  • Open in five minutes
  • 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 invest 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
  • 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
  • If you need to access your money for any other reason, you’ll pay a 25% penalty
  • Annual account charge of 0.45%
  • Dealing and other charges will depend on the investments you choose and will apply in addition to our 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 allowance
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". 

Newsletter Signup

Sign up to our Newsletter to get exclusive news and offers direct to your inbox.

About us

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.

About us

4.74 Average

23 Reviews

Jen

I found the way the different options are presented very clear - much more useful than some other comparison sites. I sent it to my daughter as well.

Paul

Very informative, find myself a good ISA account with best return in terms of interest.

Sue

Easy to use website and up to date. Saved the link on my tablet.

Rob Holden

The website was very useful and informative.

Andrew Johnson

ISA can be confusing at first and this site includes a useful and helpful introduction into the world of ISAs