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ISA: How, not how much

Important information: The value of investments can go down as well as up, so you may get back less than you invest.

By Daniel Lane, Fidelity Personal Investing

Why ISAs make sense

I joined a few colleagues on a podcast a while ago to see if we could ditch the clichés and have a frank chat about our own money goals, worries and everything in between. It was quite cathartic to hear I wasn’t the only one who didn’t quite feel on top of my entire financial world. However, for me the biggest take away wasn’t about how much I was saving but how I was saving it. 

Save smarter, not harder 

In the UK we tend to have quite a linear view of long-term savings, concentrating on stockpiling cash in bank accounts until we need to dip into it. It’s certainly a simple way to look at saving but is it the most efficient? Well, no.

The longer our money sits there doing nothing, the more it’s eroding in value through the effects of inflation. Anyone whose grandma has given them 20p to spend on sweets in the shops will be able to recognise that it buys less these days than it once did. 

Using your Stocks and Shares ISA instead of a bank vault means you have the opportunity to beat inflation instead of falling victim to it. Like any investing, there’s risk involved, so you could lose some money, but a few clicks is all it took me to find a level of risk I was happy with – have a go if you’re curious with our PathFinder tool.

I have always said, I never want money to be the reason I can’t do something and the others seemed to agree. Building up investment returns on top of the cash you save into your ISA could be the difference between hitting your goals and coming up short. You might even reach them sooner than you thought or be able to pay for the honeymoon as well as the wedding when the time comes. 


Talking of savings goals, if yours are quite far away you have the tremendous advantage of time on your side. Maybe you’d like to send the kids off to uni without worrying about them getting into debt. If so, you could think about opening a Junior ISA for them. Or perhaps you want to look at your home knowing you alone earned it. Given enough time and some smart ISA saving, you could be toasting a major life achievement with something fun and bubbly.

Unfortunately, a lot of savers won’t be able to celebrate and pop that cork simply because they chose to save, particularly as we’re in a time of record-low interest rates. This is a prospect that helps a lot of people become Stocks and Shares ISA investors.

It used to be that one of the biggest hurdles was choosing an investment to put in your ISA – but even that side of things isn’t difficult anymore. You don’t need to geek out on stock market graphs or even the companies behind them. Professional fund managers are there to do it for you. You can then use this information to help you decide where to invest. Here are a few ways we like to make choosing an investment easier

In the end, I think it’s really about doing what you can with what you have. This is hardly news, but how you go about it can have a very pronounced effect on what you end up with, especially over the long term. 

A Stocks and Shares ISA could be a way to grow your money and keep the growth you’ve earned. If you’re trying to do everything you can to help your future self, they might be the way forward for you. 

Important information

Tax treatment depends on individual circumstances and all tax rules may change in the future. Investors should note that the views expressed may no longer be current and may have already been acted upon. Withdrawals from a Junior ISA will not be possible until the child reaches age 18.

Please note that this information and our guidance tools are not a personal recommendation in respect of any particular investment. If you need additional help, please speak to an authorised financial adviser. You should regularly reassess the suitability of your investments to ensure they continue to meet your attitude to risk and investment goals.

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What you could do next


Start saving in an ISA

Invest in our Stocks and Shares ISA and pay no income or capital gains tax on your returns.


Help me decide my risk level

With our PathFinder tool, it will point you towards a fund for you to consider, based on your selected risk level.


Get help choosing investments

Whether you need a lot of help or a little we have the right tool to help you find an investment