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.
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.
Double your money with our ISA prize draw
Invest a lump sum in an ISA online by 31 March 2020, and we’ll give you the chance to win back your initial investment - up to £20,000.
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
Win back the value of your ISA investment in cash- up to £20,000, (the “Prize Draw”).
Terms and Conditions
- The promoter of this offer is Financial Administration Services Limited, 130 Tonbridge Road, Hildenborough, Tonbridge, Kent TN11 9DZ (“Fidelity”).
- To be eligible to enter the prize draw you must be 18 years of age or older and a UK resident. Fidelity employees and its contracted staff are not eligible to enter.
- Entry into the Prize Draw will constitute your acceptance of these terms and conditions. Entry will be automatic when you make a Qualifying Investment (see below).
- If you do not wish to be entered into the prize draw, please call our contact centre on 0333 300 3350 and request to be removed from the draw, after you have made a Qualifying Investment. The contact centre is available between 8am and 6pm, Monday to Friday, and 9am and 2pm on Saturday.
- The prize draw period is from 17 January 2020 to 31 March 2020 (the “Prize Draw Period”). Entries close 31 March at midnight (GMT). The Prize Draw amount will match the lump sum amount invested into a Fidelity 2019/20 ISA during the Prize Draw Period and the prize money will be paid in cash into your bank account.
- Qualifying Investment
* Any lump sum investment made into a 2019/2020 Fidelity ISA during the Prize Draw Period through the Fidelity Personal Investing website: fidelity.co.uk
The following examples, without limitation, will not be Qualifying Investments:
* ISA transfers or re-registrations from other providers
* Investments made through an adviser;
* Investments in the Fidelity Junior ISA;
* Investments via a regular savings plan;
* Investments via Bed and ISA;
* Investments made over the telephone or through a paper application (investments must be made online through the fidelity.co.uk website in order to qualify).
- After the Prize Draw Period, the winners will be selected at random. All winners will be drawn after 1 April 2020 and will be notified via post, secure message via their Fidelity online account, or phone, before 30 April 2020. Payment of the prize money will be made within 90 days of the notification. There will be four winners in total.
- Only one entry per person is available. If multiple ISA investments are made during the Prize Draw Period, the first investment in time will qualify for entry to the Prize Draw, and the amount invested at that point will be the prize amount payable.
- The winner's prize money will be paid by BACS to your bank account. If we do not hold a bank mandate on the account, you will need to provide those details to receive the prize. Cheques will not be sent in place of providing bank details.
- Fidelity reserves the right to cancel or amend the prize draw or the rules without notice during the Prize Draw Period. Any cancellation of or changes to the prize draw will be notified to you on the Fidelity website.
- If you withdraw your qualifying investment from your Fidelity ISA, or add an adviser to your account, within a 12-month period from the date of investment, Fidelity reserves the right to reclaim the prize money awarded.
- Fidelity shall not be liable for any loss or damage suffered from entry into the prize draw, acceptance of the prize, any defects, delays or inadequacies in the prize or the arrangements surrounding the prize, or from any event beyond the reasonable control of Fidelity. Fidelity shall not be liable in contract, tort, negligence or otherwise for any direct or indirect consequential loss suffered by an entrant in relation to participation in the prize draw. Nothing in these terms and conditions shall operate to exclude or restrict liability of Fidelity from time to time for death or personal injury resulting from negligence.
- Where relevant, reference in these terms and conditions to the winner includes any person with whom the winner shares the prize.
- In the event of any dispute regarding the rules, conduct, results and all other matters relating to a prize draw, the decision of Fidelity shall be final and no correspondence or discussion shall be entered into.
Any personal information you submit to Fidelity will be maintained in accordance with the UK Data Protection Act 2018 and used in accordance with the Fidelity Privacy Statement. Your personal information will never be disclosed to a third party without your prior consent, however, should you be a winner, your full name and county can be disclosed to anyone who requests this information, unless you inform us that you would like this information to be withheld. Your contact details will only be used to contact you and notify you if you have won a prize.