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JohnTest

ISA accounts in 60 seconds - different types of ISA

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The Individual Savings Allowance (ISA) limit will remain at £20,000 for the 18/19 tax year, letting people save tax-free in a range of different ISA accounts. But with so much choice it’s not easy to know which ISA is most appropriate for you. The below gives a good overview of the options available, but if you have any ISA related questions please ask away.

 

At the last count, the Cash ISA was the most widely held amongst UK adults with 8.5 million subscribed. However this number has fallen each year since 2008 partly due to the dismal interest rate that Cash ISAs currently offer. The average rate listed on comparison site MoneySupermarket.com was a meagre 0.8% at the time of writing.

 

Meanwhile the Stocks & Shares ISA has proved more popular, particularly over the last two years while the stock market has boomed. If someone is looking to start accumulating wealth over the long term (3+ years) then a Stocks & Shares ISA will be more appropriate for the majority of people. You can read more about IG's Stocks and Shares ISA here, and if you have any questions, ask below and I'll be on hand to help.

 

More recently the Help-to-Buy ISA became available to budding homeowners. You can open the account with a maximum of £1,200 and then squirrel away up to £200 per month. The government will add a bonus of 25% based on the size of your pot, up to a maximum of £3,000.

 

There’s also the Lifetime ISA that was launched in April 2017, offering the dual possibility of saving towards a first-home or retirement. This offers a potentially larger government bonus than the Help-to-Buy ISA too, but on stricter terms. You can use £4,000 of your £20,000 annual allowance and the government will top up your savings up by 25% each year. However you’ll get a 25% penalty if you choose to withdraw your cash or assets before you buy a home or turn 60 years old.

 

The Innovative Finance ISA can be used for peer-to-peer lending. Although this type of investing isn’t protected by the Financial Services Compensation Scheme, companies operating in this space are regulated by the FCA.

 

If you have any ISA related questions please ask away.

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Which ISA’s can/can’t I have all at the same time? Can I have a cash + stocks + HTBuy and then just split the £20k across them as I want?

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Hi  thanks for your question. Although I'm not a portfolio manager, as a Senior Sales Trader I should be able to help. You can have both a cash and a stocks and shares ISA, however the best place to get info on 'Help to Buy' is probably here: https://www.helptobuy.gov.uk/help-to-buy-isa/faq/

This HTB is an offering not covered by IG so I'd suggest having a good look on that page. Looking at the list there is a question "I already have a cash ISA – can I open a Help to Buy: ISA too?" which should provide you with your answer. Any further questions, just ask. 

 

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I need to transfer some shares to IG from another broker which are held in an ISA. Can this be done without transferring the entire ISA?

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 that should be fine - just fill out the ISA transfer form as normal and make sure you only write down the stock you are wanting to transfer. 

 

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