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Investment ISAs put your capital at risk & you may get back less than you originally invested.
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:
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:
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.
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.