What a Stocks & Shares ISA does differently
A Stocks & Shares ISA allows you to invest in assetsAn asset is anything that holds value and which can be bought and sold freely. like fundsFunds, also called ‘tracker funds’, are financial instruments that have been set up to match or ‘track’ the price of a market index. Investing in a fund lets you get exposure to different financial assets like shares and bonds, without having to buy them directly. or shares while shielding growth, dividendsThe amount of profit that a company returns to its shareholders., and gains from tax. It’s designed for long-term investing rather than short-term saving.
Why the tax year deadline is important for investors
You receive a new ISA allowance of £20k every tax year, but unused allowance doesn’t roll over. Using what you can of your ISA allowance each tax year gives your money more time to grow tax-free and reduces future tax complexity.
How to approach investing before the deadline
You don’t need to invest a large amount. Using the ISA wrapper is often more important than the size of the contribution. Long-term investors benefit most from starting earlier rather than waiting.
Things to keep in mind
Investments can go down as well as up. So, while the risks may be higher than saving – so can the potential rewards.
Anything that you have saved over your three to six month savings buffer – that’s the cash you’ll need in an emergency – could see better returns over time if it is invested. That’s especially true with the tax advantages of a Stocks & Shares ISA.
Key tax year timings
To get you ready for 5th April, check out our timings for final deposits, transfers, move money, and new account openings.