1. What is a Stocks and Shares ISA?
ISAs are a tax-efficient way of investing, second-only to pensions. They are a ‘wrapper’ in which you can save and invest and grow your money free from income and capital gains tax. Every eligible adult has the same annual ISA allowance, regardless of whether you’re a higher rate taxpayer or a non-taxpayer.
2. How much can you put in an ISA?
In the current tax year you can invest up to £20,000 within your ISA. But you don’t have to invest the whole sum in one go. Instead you can choose to invest in your ISA on a regular basis or make ad hoc payments throughout the tax year, which runs from 6 April to 5 April.
3. How many ISAs can you have?
While you can only pay into one Stocks and Shares ISA in each tax year, you can open a new ISA with a different provider each year if you want to. However, it can be easier to keep track of your investments and possibly cheaper too, if you consolidate them with one provider.
4. When can I invest in an ISA?
You can invest in an ISA every tax year between 6 April and 5 April. With Fidelity you can invest from as little as £50 and choose how often you top up your ISA savings - monthly, quarterly, half yearly or yearly.
Don’t be put off if you don’t have £20,000 to invest every year. Getting into the habit of investing regularly is still worthwhile. That regular investment will soon grow and better yet, you can keep adding to it. It’s a great way to save for your future goals.
5. Can you hold shares in your Stocks and Shares ISA?
Yes you can and if you’re investing for the medium to longer term, Shares are worth considering as they can offer the potential for attractive returns. .
6. Can I get my money if I need it?
Yes you can. The beauty of investing in an ISA is that you are free to withdraw your money at any time. However, it’s worth noting that if you do withdraw money from your Stocks and Shares ISA with Fidelity and then decide to reinvest it at a later date, it will count towards your annual ISA allowance. We don’t yet offer the flexibility to withdraw and replace money without the replacement money counting towards your ISA allowance.
7. Can I consolidate my ISAs into one place?
Yes you can and it can make managing your savings and investments easier when they’re all in one place. Just make sure that you use a transfer scheme to move your ISA savings from one provider to another. That way you keep your ISA savings - and the tax-efficient wrapper - intact.
8. Do I need to invest all at once?
If you haven’t got £20,000 to hand, that’s not a problem. That’s only the annual ISA limit, but you can kick-start your ISA with a one-off lump sum of at least £1,000 or you can invest smaller sums on a regular basis with Fidelity. You can start saving as little as £50.
9. Why should I consider a regular savings plan for my ISA?
Regular savings, which start from just £50 a month, are a good way to make ISA saving easy and affordable. You can set up a direct debit and know your ISA is being topped-up every month. You can also put a lump sum into your ISA at any time, as long as the overall sum you invest into your ISA is within the same tax year and doesn’t add up to more than £20,000.
As well as making saving simple and automatic, saving regularly enables you to take advantage of something called pound cost averaging - when prices are lower your money buys you more shares or units when they are higher it buys you fewer. Overall this can have a ‘stabilising’ effect on your savings.
10. What is an inherited ISA?
ISAs can only be passed on and continue to be maintained within their tax-efficient ISA ‘wrapper’ by a spouse or civil partner. They pass from spouse to spouse on death as an Additional Permitted Subscription (APS).
If there isn’t a spouse or civil partner for the ISA to pass on to then the ISA benefits remain intact while the administration of the deceased ISA-holder’s estate is carried out or until the third anniversary of death (whichever is sooner). Then the investments within the ISA are sold and the proceeds distributed as per the deceased’s wishes.
11. Can I do a Bed and ISA to utilise my ISA allowance?
Yes, you can. Bed and ISA simply involves selling investments that you hold outside an ISA and automatically using the proceeds to open or top up your ISA. It’s a flexible, low-cost way to make use of your ISA allowance.
You can choose to repurchase the same investments, buy another investment or just hold cash. And you will not pay any more UK income or capital gains tax on those investments once they are in your ISA.
Important information- investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment on ISAs depends on individual circumstances and all tax rules may change in the future. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.
What you could do next
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Our ISA guide gives you all the facts you need to know before starting to invest in an ISA.