ISAs
Individual savings accounts were first introduced in 1999 and have been a popular vehicle for investing since, there are now five variations of ISA available
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Stocks and Shares ISA
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Cash ISA
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Lifetime ISA
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Help to buy ISA
The current maximum annual contribution to any ISA is limited to £20,000 and growth is free of income or capital gains tax, there is no limit on the amount that can be held in an ISA and withdrawals can be made in general with no notice unless stipulated by the provider. ISAs held elsewhere can be consolidated into one wrapper by completing an ISA transfer.
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You must be at least 18 years of age to open all ISAs other than a Cash ISA which can be opened at 16.
Stocks and shares ISAs (equity ISA) can be opened with RDS Financial Planning and can contain any of the following investments
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Shares
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Unit Trusts
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Investment Trusts
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Open-ended investment companies
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Gilts
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Corporate Bonds
Other options available from other providers are:
Cash ISAs are generally opened and held with banks and building societies and pay either variable or fixed interest
Lifetime and Help to buy ISAs both are designed to support building up a fund for a deposit for first time property buyers, the Life time ISA allows also to use the accumulated fund to provide an income in retirement.
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The value of investments can fall as well as rise. You may get back less than you invested.
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For ISA’s Investors do not pay any personal tax on income or gains but ISAs do pay unrecoverable tax on income from stocks and shares received by the ISA manager . Tax treatment varies according to individual circumstances and is subject to change.
You will incur a lifetime ISA government withdrawal charge (currently 25%) if you transfer the funds to a different ISA or withdraw the funds before age 60 and you may therefore get back less than you paid into a lifetime ISA.
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By saving in a lifetime ISA instead of enrolling in, or contributing to an auto-enrolment pension scheme, occupational pension scheme, or personal pension scheme:
(i) you may lose the benefit of contributions from your employer (if any) to that scheme; and
(ii) your current and future entitlement to means tested benefits (if any) may be affected.