Stocks and Shares ISAs: the tax efficient way to build an investment portfolio
Stocks and 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 tax.
The tax treatment for ISAs may be subject to change in the future.
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 £20,000 for 2017/2018. It's up to you how you split your £20,000 allowance across Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs and a Lifetime ISA as long as you don't go over that amount in total (maximum of £4,000 in a Lifetime ISA if you are eligible).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 earned.
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.