Tax-efficient savings and investment are
possible with one of four ISA products
exclusively available to UK residents

An Individual Savings Account (ISA) is a type of tax-efficient savings account available to UK residents. These accounts allow individuals to save and invest up to a set threshold each tax year. 

There are four types of ISAs - excluding a junior ISA - namely:

• Cash ISAs*
• Stocks and shares ISAs
• Innovative finance ISAs
• Lifetime ISAs

*By referral
 

Cash ISAs can only include cash. Stocks and shares ISAs can only include stocks, shares, unit trusts, government bonds and corporate bonds. Innovative finance ISAs can hold peer-to-peer loans or crowdfunding debentures. Lifetime ISAs can hold cash, stocks and shares. There are limits on how much you can put into an ISA within one tax year. This limit applies across the different types of ISA accounts.

The process of setting up an ISA should be geared towards the individual’s needs and investment expectations, while also explaining all potential risks. The process must begin by comparing the personal and financial circumstances of the individual against the ISA products and other investments in case an ISA isn’t the optimum strategy.

Once an ISA has been identified as most suitable, an application will need to be submitted to set up the ISA, and from there the funds would need to be transferred into the ISA. To make the most of an ISA as an investment, it must be continually monitored and reviewed.
 

Before choosing any ISA or alternative investment product, several considerations should be made:

• Investment amount
• Fees and charges
• Maximum risk exposure
• Access to funds and flexibility
• The client’s longer-term financial goals

Due to the aforementioned considerations and others, taking out an ISA is a serious investment. It’s preferable and advisable to receive financial advice before choosing an ISA to invest in.

The main benefit of getting ISA advice is it ensures that you only save or invest in a product that matches your circumstances and risk tolerance. Investing without initial ISA advice could put your money at greater risk than you’re willing to take on. Receiving advice could also make you aware of alternative saving and investment opportunities that are more aligned with your needs. 

Consult with a Taylor James financial adviser now and learn what ISA or alternative product is best for your situation. Our friendly advisers are ready to patiently explain all of your options in detail, so you can make informed investment decisions.