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ISAs Explained /

What Exactly Is An ISA?

How does it work
Individual Savings Accounts, more commonly referred to as ISAs, debuted in 1999 and offer tax incentives to encourage UK residents to save. These savings and investment 'vehicles' offer a variety of options and benefits, but they also come with their share of rules and regulations. To ensure you benefit from the full advantages of these accounts, it's important to understand exactly how ISAs work and the rules governing them before you open one.
Investment Fund Supermarket ISAs

Click & Invest Stocks & Shares ISA

from Investec Click & Invest

Allows ISA Transfers
  • Protection Scheme: FSCS
  • Fund Choice: Managed Portfolios
  • Invest From: £2,500

Why we like it: In a nutshell this service helps make your ISA money work harder! Investec Click & Investis an online investment service that aims to make actively managed, globally diversified investment portfolios accessible to a wider audience. Everyone deserves harder working money, and Click & Invest’s goal is to make a positive difference to more financial futures. Their experts build and manage investment portfolios from £2,500 online, intelligently blending expertise with high-quality service. With a £2,500 minimum investment, Click & Invest aims to deliver an exceptional service for a straightforward fee. They offer both stocks and shares ISAs and general investment accounts, with a seamless online experience, with dedicated 24/7 support available. Capital at risk.More info...

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. Capital at risk

Share Dealing ISAs

Youinvest ISA

from AJ Bell

  • Trade From (frequent trader rate): £4.95
  • Trade From (standard trader rate): £9.95

Why we like it: Voted ‘Best ISA Provider 2017’ in the City of London Wealth Management Awards. Place 10 deals or more per month and pay only £4.95 per online deal in the next month. Deal from £1.50 and never pay more than £9.95 per online trade. Capital at risk

Investment Income Plan ISAs

FTSE 100 Defensive Income Plan

from Investec

Allow ISA Transfers
Annual Income up to 6.70%
  • Counterparty: Investec Bank
  • Term: Maximum 8 years

If you’re looking for high income, then the ability to receive 6.70% per year even if the FTSE falls almost 20%, could be appealing.

  • Up to 6.70% per year based on the performance of the FTSE 100 Index
  • Income paid even if Index falls by 20%
  • Quarterly payments
  • Alternative option also available paying up to 5.10% pa if the FTSE doesn't drop by 40% or more
  • Capital is at risk if the FTSE 100 Index has fallen by more than 40% at maturity from it's initial level, in which case your initial investment will reduce by 1% for each 1% fall
  • Minimum investment £3,000
  • An arrangement fee applies for this plan
  • Product designed to be held for the full term

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

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.

Investment Growth Plan ISAs

FTSE 100 Enhanced Kick Out Plan

from Investec

Allow ISA Transfers
Maximum Potential Return 9.60% per annum
  • Counterparty: Investec Bank plc
  • Term: Up to 6 years

Kick out plans seem to attract particular interest when the market is at historically high levels since they can provide competitive returns even if the FTSE stays relatively flat with the potential for 9.60% annual growth.

  • 9.60% for each year (not compounded) provided the FTSE 100 finishes higher than its starting value (subject to averaging)
  • Potential to mature early, from year 1 onwards
  • Available for ISA, ISA transfer and direct investment
  • Capital is at risk if the FTSE 100 Index has fallen by more than 40% at maturity from it's initial level, in which case your initial investment will reduce by 1% for each 1% fall
  • Minimum investment £3,000
  • 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.

What Exactly Is An ISA?

Understanding the foundation of Individual Savings Accounts

Individual Savings Accounts, more commonly referred to as ISAs, debuted in 1999 and offer tax incentives to encourage UK residents to save. These savings and investment 'vehicles' offer a variety of options and benefits, but they also come with their share of rules and regulations. To ensure you benefit from the full advantages of these accounts, it's important to understand exactly how ISAs work and the rules governing them before you open one.

What is an ISA?

Many financial experts recommend that ISA should be a first port of call to individuals who want to put money into savings or investments. These savings vehicles provide more in the way of tax-efficient benefits than most others types of accounts, giving the account holder a greater rate of return on their initial deposit.

There are two types of ISA - cash ISAs and investment ISAs (also known as stocks and shares ISAs). Cash ISAs offer tax-free interest, while investment ISAs offer returns that are exempt from capital gains tax.

Who can contribute to an ISA?

Any UK resident over the age of 16 can open and contribute to an ISA. However, account holders under 18 are only able to open cash ISAs; stocks and shares ISAs are not available to this age group.

Account holders 18 and older are allowed to open one stocks and shares ISA and one cash ISA each year. As the name suggests, ISAs are individual accounts, which means that joint ownership is not available.

What are the contribution limits?

Because of the tax benefits ISAs provide, the amount you can contribute into an ISA is limited each year. Check the current limit here:

Can money be withdrawn from an ISA?

Money can be taken from an ISA at any time. However, there can sometimes be drawbacks to doing so. Withdrawing money from an ISA does not change the contribution limits for that year. So, if you've invested the full amount allowed in your ISA for the year and then withdraw £1,000, you cannot then put that money back into the ISA during the current taxable year, because you have already reached your contribution limit with your initial deposits.

An ISA can be a sensible choice for savers and investors alike. Whether you're looking for a tax-efficient way to put cash aside for the future, or looking to invest without paying capital gains tax, an ISA may be the perfect option for you.

Read more here: The Comprehensive Guide to ISAs

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

How much can I pay into an ISA?

21st March 2019

Each tax year, there's a limit set by the government to the amount you can save and invest in ISAs: your “annual ISA allowance”. The allowances are intended to reward savers and encourage us to invest more to support our future retirements, without creating a tax haven that can be taken advantage of by very wealthy individuals who just want to avoid paying tax.

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