Stocks & Shares ISA – top five questions to consider

 

How do you choose between a Cash ISA and a Stocks and Shares ISA?

An Individual Savings Account or ISA is a like a wrapper that protects your money from tax. This year the government is offering everyone over the age of 18 a tax free ISA allowance of £20,000.

You can choose to put your allowance into either a cash ISA or a stocks and shares ISA… but if you don’t use it before the 5th April, you lose it.

So how do you decide where to put your money? We’ve highlighted the key questions you should ask yourself:

 

 

1. Are cash ISAs still a good way to grow your money?

 

Cash ISA Interest
Inflation

 

The best rate for an Easy Access Cash ISA is currently around 1.1%1 but the current rate of inflation is 3.1%2.

If the cash you hold in savings doesn’t grow at a rate at least equal to inflation then the real value of those savings is eroded as the cost of living increases.

 

 

2. Can investing beat inflation?

 

 

 

There are risks associated with investing but there is also the potential for your returns to be greater than the current rate of inflation. An average Stocks and Shares ISA grew 15.8% during the 2016/17 tax year3 ↑

 

 

3. What are the drawbacks associated with a stocks and shares ISA?
  • Market fluctuations – The value of your investment can go down as well as up
  • 3 years or more – Investing is only suitable for the long-term
  • The fees – There are costs associated with investing

 

4. What are the benefits of a Stocks and Shares ISA?

 

 

  • Returns – The potential to make more over the long-term

  • Tax-free – you are sheltered from any tax on gains or regular income

  • Flexibility – You’re free to withdraw ISA money at any time

 

5. Why invest with a Click & Invest Stocks & Shares ISA?

 

 

14.5%

Returns offered by Click & Invest Measured Investment Strategy between Jan and Dec 2016*

 

Tax-free

We have over 180 years’ experience of managing investments

 

Flexibility

We aim to beat the market, not just track it

Small fee

We only charge a fee of 0.65% (plus underlying charges that average 0.60%)

Transfer

We accept transfers of Cash ISAs or Stocks & Shares ISAs at any time of the year

1Money Supermarket, 2Office for National Statistics, November 2017; 3Moneyfacts;

*Past performance is not an indicator of future performance.

The tax advantages of ISAs may change in the future and will also depend on your individual circumstances.

 

All investment carries risk and it is important you fully understand these risks and are willing to accept them.

You may get back less than you invested.

 





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