Investing in ISAs
ISAs are one of the most tax-efficient and popular ways to save and invest for the future, offering attractive tax breaks and huge flexibility.
What is an ISA?
An Individual Savings Account (ISA) provides a valuable and tax-efficient wrapper for cash or stocks & shares.
Any money saved into an ISA benefits from tax efficient growth; any income and gain made does not need to be declared. Any returns or income received from an ISA does not impact any personal allowance received.
There are two main types of ISAs, a Stocks and Shares ISA and a Cash ISA. Individuals can invest into cash, stocks or shares, or both, as long as they do not exceed the annual ISA allowance, which for the 2024/2025 tax year is £20,000. Your allowance resets on the 6th of April each year.
Working with a financial adviser ensures you get the best deal available to you at the time of investment. Contact us today to learn about how we can make your money go further with ISA investments.
The value of an ISA with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than you invested. An investment in a Stocks and Shares ISA will not provide the same security of capital associated with a Cash ISA.
The favourable tax treatment of ISAs may be subject to changes in legislation in the future.
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Cash ISAs
Cash ISAs
With a Cash ISA, money can be saved in instant access or fixed-rate accounts by anyone over the age of 16. Instant access accounts are likely to have lower interest rates but won’t come with any fees or penalties for withdrawing funds. Fixed-rate accounts are likely to have increased interest rates, but will deter savers from withdrawing money until the fixed-term comes to an end by potentially imposing early exit fees.
Cash ISAs are not available through St. James’s Place.
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Stocks and Shares ISAs
Stocks and Shares ISAs
Stocks and Shares ISAs hold investment funds and/or shares, and can be opened by anyone over the age of 18. There are numerous places your money could be invested if you choose a Stocks and Shares ISA, such as unit trusts, investment trusts, individual stocks and shares, and corporate and government bonds.
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Junior ISAs (JISA)
Junior ISAs (JISA)
Junior ISAs (JISAs) are for parents or grandparents looking to invest money for their children’s future. Every year, a total of £9,000 can be paid into a JISA. The tax benefits of a JISA are the same as an adult ISA, such as tax efficiency and no further tax to pay on income or capital gains. When your child turns 18, you can either choose for this money to be paid to them or it will be converted into an adult ISA.
Although anyone can contribute to an ISA for a child only the parent/legal guardian can open the ISA for them.
Cash ISAs
Stocks and Shares ISAs
Junior ISAs (JISA)
Cash ISAs
With a Cash ISA, money can be saved in instant access or fixed-rate accounts by anyone over the age of 16. Instant access accounts are likely to have lower interest rates but won’t come with any fees or penalties for withdrawing funds. Fixed-rate accounts are likely to have increased interest rates, but will deter savers from withdrawing money until the fixed-term comes to an end by potentially imposing early exit fees.
Cash ISAs are not available through St. James’s Place.
Stocks and Shares ISAs
Stocks and Shares ISAs hold investment funds and/or shares, and can be opened by anyone over the age of 18. There are numerous places your money could be invested if you choose a Stocks and Shares ISA, such as unit trusts, investment trusts, individual stocks and shares, and corporate and government bonds.
Junior ISAs (JISA)
Junior ISAs (JISAs) are for parents or grandparents looking to invest money for their children’s future. Every year, a total of £9,000 can be paid into a JISA. The tax benefits of a JISA are the same as an adult ISA, such as tax efficiency and no further tax to pay on income or capital gains. When your child turns 18, you can either choose for this money to be paid to them or it will be converted into an adult ISA.
Although anyone can contribute to an ISA for a child only the parent/legal guardian can open the ISA for them.
Where and how you invest your money will be dependent on your financial goals.
Speaking to a Wealth Management specialist will be integral to ensure you
choose the right investment structures for your future needs.
ISA Allowance & Benefits
The 2024/2025 tax year ISA allowance is £20,000, which will reset on the 6th of April 2025. The tax benefits of ISAs provide an attractive option for many. All interest or gain earned is tax efficient and no further tax needs to be paid on income or capital gains.
A further ISA tax benefit is the ability to switch between funds or shares, without triggering a Capital Gains Tax Liability.
However, there are a few things to note within ISA tax rules:
- ISAs are not exempt from Inheritance Tax (IHT). Any money left in an ISA on the death of an individual counts towards the value of their estate and will be subject to IHT if their overall estate is more than £325,000.
- ISAs also cannot be held jointly or on behalf of someone else.
- If you do not use your £20,000 allowance, there is no ability to ‘carry over’ unspent allowance to the next tax year.
Long-term investing with ISAs
ISAs can be a great way to set up a long-term investment scheme. Much like many other financial investments, the earlier you start building up your ISA pot, the more growth potential you have.
Benefits of working with Cooper Associates
As highly experienced Wealth Management professionals, we will work closely with you, establishing your risk profile to create a bespoke, well-diversified, and balanced ISA portfolio. Through regular review meetings with your dedicated financial consultant, we can adjust the mix to reflect your changing needs or any changes to the markets.
Investing is best suited by taking a long-term approach; however, some ISAs do provide you with the freedom to access your capital whenever you need. One of our competitive advantages is that through St. James’s Place we can draw on the expertise of some of the world’s leading investment professionals to manage your investment portfolio. No matter whether you are looking to invest for income or growth, we will provide first-class advice and access to a wide range of investment solutions to help you achieve your financial goals.
Open an ISA with Cooper Associates
Investments into a St. James’s Place ISA can be made by regular monthly contributions or as an annual lump sum contribution.
Speak with an adviser regarding your savings objectives.
Frequently Asked Questions about ISAs
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Who can Open an ISA?
Who can Open an ISA?
- To open a Cash ISA, you must be a UK resident and be over the age of 16
- To open a Stocks and Shares ISA, you must be a UK resident and be over the age of 18
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Can I pay into more than one ISA?
Can I pay into more than one ISA?
The ISA rules changed for the 2024/2025 tax year, meaning you can now open and pay into multiple ISAs of the same type in the same tax year. The exception is Lifetime ISAs where the limit of one per tax year still applies.
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Can I withdraw money from an ISA?
Can I withdraw money from an ISA?
If you have a flexible ISA, then you can withdraw money at any time without penalty. If you are on a fixed-term rate, then you may not be able to withdraw your money without incurring a penalty fee. You can fully or partially withdraw from a Stock and Shares ISA although the value will depend on the underlying investment.
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Are there any penalties for withdrawing money from an ISA?
Are there any penalties for withdrawing money from an ISA?
Penalties for withdrawing from a fixed-rate or Stocks and Shares ISA will differ amongst providers. Ask your Wealth Manager to check the terms and conditions for you if you are unsure.
Who can Open an ISA?
Can I pay into more than one ISA?
Can I withdraw money from an ISA?
Are there any penalties for withdrawing money from an ISA?
Who can Open an ISA?
- To open a Cash ISA, you must be a UK resident and be over the age of 16
- To open a Stocks and Shares ISA, you must be a UK resident and be over the age of 18
Can I pay into more than one ISA?
The ISA rules changed for the 2024/2025 tax year, meaning you can now open and pay into multiple ISAs of the same type in the same tax year. The exception is Lifetime ISAs where the limit of one per tax year still applies.
Can I withdraw money from an ISA?
If you have a flexible ISA, then you can withdraw money at any time without penalty. If you are on a fixed-term rate, then you may not be able to withdraw your money without incurring a penalty fee. You can fully or partially withdraw from a Stock and Shares ISA although the value will depend on the underlying investment.
Are there any penalties for withdrawing money from an ISA?
Penalties for withdrawing from a fixed-rate or Stocks and Shares ISA will differ amongst providers. Ask your Wealth Manager to check the terms and conditions for you if you are unsure.
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Our Locations
Taunton (Head Office)
T. 01823 273 88040 St. James Buildings,
St. James Street,
Taunton, Somerset TA1 1JR
Exeter
T. 01392 345 544Regus Business Centre,
3rd Floor, The Senate,
Southernhay Gardens,
Exeter EX1 1UG
Plymouth
T. 01752 746 8484th Floor, Salt Quay House,
6 North East Quay,
Sutton Harbour,
Plymouth PL4 0HP