An Individual savings account (ISA) gives you the option to save money without paying tax on the growth, interest or returns.
In today’s world there are many different types of ISA, however the two main ones are Cash ISA and Stocks and Shares ISA’s.
The Government give us a Tax-free allowance that we can use each year, this tax year it is £20,000, its up to you to decide if you would like to put this into a Cash ISA, Stock and Shares ISA or split it across the two. You cannot carry over your allowance so this re sets every April.
In the current financial climate of low interest rates and rising inflation more and more people are people are turning to Stocks and Shares over Cash ISA’s for potentially better returns.
Let’s take a look at the difference
Cash ISA
High street banks offer this service and it works like a normal savings account
As long as your provider is covered by the Financial services compensation scheme (FSCS) then your capital is covered up to £85,000 if your provider goes into liquidation.
Cash is a safer bet for short term savings as it is easier to access for example, Emergency funds.
However, interest rates have continued to be low for some time now and with inflation creeping up the real value of money held in cash is going down.
Stocks and shares ISA
Offers the possibility of better returns in the long run, so if you are planning for your future and trying to make the most of your money over the longer term, or you are concerned about inflation then this could be suited to you.
As with all investments, your portfolio can go down as well as up. And you may get less than you invest.
100% of the first £50,000 invested is covered under the FSCS
Tailored around your ethical preferences and attitude to risk.
If you would like to discuss the options available for utilizing, you allowance and the range of services our specialists can help you with please call us today on 01202 676983.
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