ISA

ISA’s are tax free savings plans for cash and investments in shares, bonds, collectives and insurance policies (See Below).

Cash ISA’s (Mini ISA)

Sometimes thought of as a turbo charged building society account the cash portion currently £3,000 per year is usually a deposit with a bank or building society and because its an ISA the interest and growth is tax free. You are allowed one ISA provider per year.

Stocks and Shares ISA’s (Mini or Maxi ISA)

You can have either a Mini or a Maxi stocks and shares ISA, depending whether you have already got a cash mini ISA. If you have a cash mini ISA you can invest a further £3,000 in to stock and shares for exposure to the stockmarket again in a tax effective vehicle.

If you have no cash mini ISA then you can invest the full ISA allowance in to a stocks and shares ISA. By definition stocks and shares invest in the stock market and carry potentially more investment risk than cash.

However there is a significant potential up side available using stock market investments as you have the possibility of gaining not only share dividend but possible capital growth if the price of the shares goes up. Unfortunately the price of shares can go down too. Depending on the time period you can afford to invest over this may or may not be a decisive factor.

Property Based ISA’s

It is now possible to include property funds within your ISA wrapper this can help to spread your assets into different classes than have traditionally been available.