ISAs have always been a popular choice for tax-free saving. Today, more than 20 million people in the UK have one.
However, recent changes mean that ISAs are even more generous and flexible than before. This guide explains why and how investment companies can help you get the most out of them.
ISAs were launched in 1999 and have become one of the most popular ways to save. It’s easy to see why. ISAs allow your savings to grow free from tax. You pay no income or capital gains tax on the investments you hold in them and you don’t even have to declare the ISA on your tax return. New to investment companies? Read 'A guide to getting started' to learn the basics
Available at www.theaic.co.uk or by calling 0800 707 707
ISAs allow you to save using two main types of investments:
1) Cash This includes bank and building society savings accounts and National Savings. These provide a very safe home for your money but can offer limited income and growth prospects.
2) Stocks and shares This includes shares and collective funds such as investment companies, unit trusts and other similar funds. These are more risky, but can offer the chance of better returns over the long term.
If you cannot afford to lose the money you put into an ISA, or think you might need your money quickly, you should not invest in investment companies and should probably stick with cash investments. This guide is aimed at UK resident individuals aged over 18 who are eligible to take out an ISA.