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Stocks and Shares ISAs

Stocks and Shares ISAs

Stocks and Shares ISAs: the tax efficient way to build an investment portfolio

Stocks & Shares ISAs, are a tax efficient way of investing your money. Your ISA allowance can be put into a range of investments and the returns are free from income and capital gains tax.

Stocks and Shares ISA at a glance

  • As it involves investments which are linked to the stock market, the risks are greater than Cash ISAs. The value of your investment can go down as well as up and you could get back less than your initial investment. However, in return the rewards can be significantly higher over the long term (five years or more) than those offered by deposit based savings accounts or Cash ISAs.
  • While there is no maturity date, like all stock market linked investments, Stocks and Shares ISAs are designed to be held for a minimum of five years.

How do Stocks and Shares ISAs differ from Cash ISAs?

Whereas Cash ISAs allow you to earn interest on your money in the same way as a traditional savings account, Stocks and Shares ISAs give you the opportunity to invest your money through collective investments.

Any UK citizen over the age of 18 is allowed to invest into a combination of Stocks and Shares ISAs, Cash ISAs and Innovative Finance ISAs each tax year, up to a maximum of £15,240 for 2016/2017. This amount can be invested entirely in either type of ISA or shared between the two. How you choose to invest your ISA allowance will depend on which ISA best suits you. After recent rule changes it is also now much easier to transfer assets between ISAs. To find out more see our helpful guide to Transferring Your ISA.

The difference between the three main types of ISAs can be summed up in one phrase: ‘risk versus reward’. Stocks and Shares ISAs potentially offer greater rewards over the longer term than Cash ISAs but their value can go down as well as up and investors could get back less than they originally invested. With a Cash ISA you won’t receive less than you put in unless you make a withdrawal from a fixed term ISA and the penalty interest is more than the actual interest accrued. 

Anyone putting money into a Stocks and Shares ISA is accepting more risk for the possibility of higher returns. 

Ask for a personal review to see the bigger picture

We offer personalised financial advice aimed at helping you make the most of your ISA allowance.

Your Skipton financial adviser will look at your savings and investments, to provide recommendations that take your circumstances and goals into consideration. There is no fee to pay upfront for the initial financial review – you’ll only pay a fee for the advice if you choose to act on our recommendations.

Learn more about Financial Advice

Stock market-based investments are not like building society savings accounts as your capital is at risk and you may get back less than you invested. The value of your investments and any income from them may fall as well as rise.

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