Compare Regular Saver ISA

Regular Saving Into A Stocks & Shares ISA

Unlike a cash ISA - which is a straightforward tax-free savings account - a stocks and shares ISA allows you to invest money up to a certain amount without paying tax. This runs from 6th April each year, check the main page to see the current ISA maximum allowance.A stocks and shares ISA allows you invest your tax-free allowance while only paying 10% tax on any investment income you make. This can add up to a substantial saving when you consider that, on dividends paid on a non-ISA investment, an additional rate taxpayer would have to part with 42.5% in tax.You have a variety of options when it comes to using your stocks and shares ISA allowance. You can:

1. Invest your full ISA allowance in a stocks and shares ISA.
2. Regular saver? Make monthly investments into an ISA (up to a maximum of £20,000 pa).
3. Use your stocks and shares ISA allowance for shares - excluding shares traded on the Alternative Investment Market (AIM) - unit trusts, investment trusts, open-ended investment companies (OEICs), life insurance policies, corporate bonds, and gilts.

Are you ready to invest in a stocks and shares ISA?A stocks and shares ISA, as with all investments, involves an element of risk, so it's important that you're in a sufficiently stable financial position. Before you open a stocks and shares ISA, make sure that:

1. Your debts are under control - you've either paid them off or have affordable arrangements in place to do so.
2. You have emergency savings that you can access easily if something unexpected occurs - if your car breaks down or you're made redundant, you'll need savings that you can use straight away.

If you're very new to saving and don't yet have a basic emergency fund, you may find that a cash ISA is more suitable for you at this stage. Once you've built up some accessible savings in this way, you might then want to consider a stocks and shares ISA, too.

Top ten things to consider when choosing a regular savings stocks and shares ISA

1. You should be prepared to invest for the medium to long term with a stocks and shares ISA - for example, for five years or more.
2. If you think you might require access to your cash in the next couple of years, a stocks and shares ISA may not be the right choice for you. Share prices can be very variable - especially in the current financial climate - and so if you were to withdraw your investment in the next twelve to eighteen months, you could end up with less money than you started with.
3. Different stocks and shares ISAs have different investment options. These range from £50 per month (e.g. through a fund) to a specified minimum investment (e.g. £1,000).
4. Some ISA providers will give you online access to your account, allowing you to see the investment performance of your ISA and keep up to date with any charges incurred.
5. If your stocks and shares ISA isn't performing as well as you'd like, you will usually be permitted to transfer it another provider. To do this, speak to your new ISA manager who will arrange the transfer, allowing you to avoid losing any tax benefits by withdrawing your cash.
6. You can transfer shares you get from an HMRC-approved SAYE (save as you earn) scheme run by your employer, or a share incentive plan, into a stocks and shares component of an ISA without incurring capital gains tax, up to your annual ISA allowance.
7. You will not be able to transfer any existing non-ISA shares, or shares you've inherited, into a stocks and shares ISA.
8. With a stocks and shares ISA, there is greater long-term growth potential than a cash ISA - however, bear in mind that the value of your investment can go down as well as up.
9. If you have a stocks and shares ISA from a previous tax year, you're permitted to move this into a current stocks and shares ISA or split it between more than one stocks and shares ISA.