An ISA (Individual Savings Account) is simply a tax-efficient way to save or invest.
The best way to think of an ISA is as a tax ‘wrapper’ – the wrapper protects your money and you aren’t charged tax on the interest you earn*, offering greater growth potential.
For each tax year, there is a limit to the amount you can invest in an ISA – the 2016/2017 tax year allowance is £15,240, and can be invested in any combination of stocks and shares and/or cash.
More flexibility when you invest – You can use your ISA allowance to invest in equity funds, bond funds and cash however you choose – with no more restrictions on the proportion you can hold in cash.
More flexibility after you have invested – You can move your money between equity funds, bond funds and cash whenever you want.
More tax savings - you now have an annual tax-efficient allowance of £15,240 to invest in an ISA, or £4,080 to invest in a Junior ISA.
More tax efficiency – You can earn tax-free interest on all the cash held in your ISA. (There used to be a 20% HMRC charge on interest generated by cash held within the stocks and shares element of an ISA.)
The value of investments can go down as well as up and you may not get back the amount invested. The value of tax savings and eligibility to invest in an ISA or Junior ISA depend on personal circumstances. All tax rules may change in future.
If you have any questions, please call our freephone UK-based team.
Monday to Friday, 8am to 6pm,
Saturday 9am to 6pm.
Please be aware that Fidelity Personal Investing does not give advice. If you are unsure of the suitability of an investment, please contact an authorised financial adviser.