Compare Scottish Widows ISAs

Who are Scottish Widows?

Originally established in 1815 to support women and children who had lost fathers, brothers and husbands in the Napoleonic Wars, Scottish Widows are now over 200 years old and provide a wide range of financial services to their customers.

Some of the financial services and products they offer include:

1. Workplace and individual pensions
2. Life and critical illness policies
3. Income protection cover
4. Annuities
5. Savings and investment products (including ISA accounts)

What is an ISA?

An ISA account is a tax-free savings account that’s available in two main forms: Stocks and Shares ISAs and Cash ISAs.

Stocks and Shares ISAs invest your money in the stock market, either via your own choice of funds and shares or through a managed investment portfolio put together by professionals. The return potential is high, but your investments can fall as well as rise in value.

Cash ISAs are savings accounts that generate interest on your cash balance. You can get fixed or variable interest rates depending on the type of Cash ISA you invest in, and your account cannot fall in value like stock market investments. However, interest rates are currently at record lows so the return potential is very low for cash savings.

What are the tax benefits of an ISA?

ISA accounts are immune from all taxes, and the two most important of which are income tax and capital gains tax.

Income tax is usually paid on dividends produced by stock market investments and interest generated from your cash savings.

Capital gains tax is usually paid on the growth of assets when you sell them - in this case, your stock market investments.

ISAs are immune from all of these taxes.

What type of ISA is a Scottish Widows ISA?

Scottish Widows do not currently offer a Stocks and Shares ISA to investors, but they do offer a Cash ISA product.

There are two main types of Cash ISAs: Fixed-rate Cash ISAs and Variable-Rate Cash ISAs.

Fixed-Rate Cash ISAs:

• Interest rates are guaranteed and are generally higher than variable-rate ISAs
• But, you are charged or lose a portion of your interest if you withdraw before the end of your fixed term
• Fixed terms typically range from 1 to 5 years
• The longer your fixed term, the higher interest rates you’ll get

Variable-Rate Cash ISAs:

• Also known as easy-access or instant-access ISAs
• Interest rates are lower than fixed-rate products and can also fluctuate up and down
• You have greater access for withdrawals - you can often withdraw as and when you please
• The more flexibility you have for withdrawals, the lower your interest rates will likely be

What ISA rules should I be aware of?

Here are our top 8 ISA rules to know before you invest:

• The current ISA allowance is £20,000 - you can’t add more than £20,000 this year and the limit refreshes every 6 April
• Your ISA allowance can be split between Stocks and Shares ISAs and Cash ISAs
• You cannot contribute to more than one Cash ISA in the same tax year
• You can add money to more than one Cash ISA in different tax years
• You cannot contribute to more than one Stocks and Shares ISA in the same tax year
• You can add money to more than one Stocks and Shares ISA in different tax years
• Transferring an existing ISA to a new ISA doesn't take away from your ISA allowance, so you can transfer as much as you like
• If you don’t use your full ISA allowance it doesn’t roll over to next year’s

How do I open a Scottish Widows ISA account?

At the current time, you cannot apply for a Scottish Widows ISA account online.

Instead, you need to:

• Read the account T&Cs and Key Features on the website
• Download, print and complete the Scottish Widows ISA application form
• Post it to Scottish Widows with your contribution method of either:
  • a cheque
  • a Direct Debit mandate (for regular payments)
  • an ISA transfer form (to transfer existing ISAs)
• Scottish Widows will create your ISA account with this information and your contribution method

Scottish Widows ISA application checklist

• You must be at least 16 years old
• You must be a UK resident
• The initial minimum deposit is £10
• You'll need your National Insurance Number and some personal details
• You have a 14-day cancellation period, during which you can close your account free of charge
• Accounts can only be opened in a sole name