Adult Savings
Build and protect your investments in your own tax haven
If you have savings or investments, you should have an ISA. Why? Because it saves tax and therefore increases returns
Achieve steady investment growth with a Stocks and Shares ISA scheme
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Did you know :
- There are two types of ISA available to you; a Cash ISA which is similar to a normal savings account but you don't have to pay tax on any interest earned and a Stocks and Shares ISA where your money is invested in the stock market.
- There is no tax on any increase in the value of your ISA, but as the value of your investment can rise and fall in line with the performance of the market, you should view a Stocks and Shares ISA as more of a medium to longer term investment to allow stock market movements to even themselves out.
What benefits can savings plans offer me?
There's no doubt money is tight for all families in the UK, but putting any spare cash you may have into a savings plan will mean at least you have something set aside for a rainy day and, who knows, you may even be able to treat yourself when the time is right to take out your lump sum. If you are fortunate enough to be able to put away some money each month into a savings plan, it's now more important than ever that you look to chieve the best possible return by seeking out plans that offer tax advantages.
This may be in the form of investing in an ISA which provides a tax-free wrapper for your investment. As the government offers all adults a tax-free ISA allowance each tax year, it really does make sense to put an ISA at the top of your savings options to make full use of that allowance, save on tax and increase your returns.
There are two types of ISA available to you; a Cash ISA which is similar to a normal savings account but you don't have to pay tax on any interest earned and a Stocks and Shares ISA where your money is invested in the stock market. Again there is no tax on any increase in the value of your ISA, but as the value of your investment can rise and fall in line with the performance of the market, you should view a Stocks and Shares ISA as more of a medium to longer term investment to allow stock market movements to even themselves out.
How will my Stocks and Shares ISA grow?
You can invest monthly in the ISA and also invest lump sums when finances permit. You'll get the most benefit from this form of savings if you view it as a medium or longer term investment of say 5 years or more.
Your ISA grows as underlying investments increase in value and dividends are added as well. There's no tax to pay, on any interest earned, no capital gains tax on any profits and you don't need to declare your Stocks and Shares ISA on your annual tax returns.
The benefit of holding your ISA for a reasonable length of time before taking out the lump sum is to allow the investment to grow steadily during that period and weather any ups and downs in stock markets. But do remember that if you had to cash in your ISA at a point when stock markets had fallen you may get back less than you paid in. A with profits ISA helps to smooth out the ups and downs in the stock markets.
With savings as with life, the first step on a journey is the most important one; with money tight you may feel saving is the last thing you can consider, but if you can start putting away a little regularly now for a sustained period you'll have a lump sum of cash to look forward to that really can make the effort well worthwhile.
If I already have an ISA investment, how easy is it to move it to another provider?
If you already have an ISA but feel that you might be better moving this to another provider, the process is simple and quick. All you need to do is give the details of your current ISA to the new provider you want this to transfer to and they will contact your current provider and sort out all the paperwork. It shouldn't take more than a couple of weeks at most and should be quick and easy.
What other savings offer tax advantages?
You can invest money in savings plans that enjoy tax-exempt status, meaning you don't pay tax on any increase in value of your fund or on the income you earn from it. You can invest monthly or annually and at the end of the life of the plan can look forward to a lump sum that's tax-free as well.
So if you're looking to put a little money aside for a rainy day, be sure to look out for those plans that offer tax-exempt savings; at least that way you can treat yourself knowing that your lump sum will come to you with no tax to pay.
