Stocks & Shares ISA

What is a Stocks & Shares ISA?

Simply put, a Stocks & Shares ISA is a tax-efficient account that you can add up to £20,000 into each tax year. You won’t pay Income Tax or Capital Gains Tax on the money inside your ISA, no matter how much it grows.

Our ISA is a flexible ISA which means you are free to withdraw and replace money from your ISA, provided it is done within the same tax year, without affecting your annual ISA allowance. There are also no limits on when you can access your money (though it’s best to plan to be invested for at least 5 years as your capital is at risk when investing).

It’s no wonder that 12 million people in the UK have an ISA, making it one of the most popular accounts for saving and investing.

Cash ISAs v Stocks & Shares ISAs.

Unlike a Cash ISA, the returns you get from a Stocks & Shares ISA aren’t limited by the provider’s interest rate. Cash ISA interest rates are often below the inflation rate, meaning money saved in them is losing buying power.

By comparison, with a Stocks & Shares ISA your money is invested and has the opportunity for much greater growth. The trade-off is that money invested is at risk of loss and you could get back less than you invest.

As a guide, savings such as an emergency fund or those for short term goals like a holiday are better in Cash ISAs, while long term (5+ years) goals can benefit from investing as you have enough time to see growth and ride out any dips in the market.

If you’re new to ISAs or investing, it’s worth reading our guide to choosing the right ISA.