For most individuals, saving into a pension is the most tax-efficient investment when planning for their future. However, an Individual Savings Account (ISA) is the next best thing.

An ISA is great for saving tax-efficiently as it allows investors to receive tax-free growth and income on their investment. Whether it be a Cash ISA or a Stocks & Shares ISA, they can be used to save for a rainy day, to help for future costs such as your children or grandchildren needing education funding, or most commonly to help bolster retirement funds, such as pensions.

You can save up to £20,000 per year into an ISA, either Cash or Stocks & Shares, or a mix of both. There are also other alternatives such as Lifetime ISAs, AIM (Alternative Investment Market) ISAs, Junior ISAs and Help to Buy ISAs, which may have different limits. Whatever your ISA needs, we can help you choose the most suitable type and help you manage the investment side of things, if appropriate.

The two most popular ISAs are Stocks & Shares ISAs and Cash ISAs.

Stocks & Shares ISAs allow you to invest your money in a range of investment funds such as Open-Ended Investment Companies & Unit Trusts, Investment Trusts, Exchange Traded Funds etc. that allow you to benefit from growth potential of certain stock markets. You do not receive interest on these investments, and they grow in value by the markets performing well during the time you are invested. Markets do not always perform in an upward trend, and there is a possibility you could get back less than you invested depending on when you withdraw funds.

However, that of course is not the aim of the game. Our role as your financial adviser is to select investments that we feel will add value and are well diversified (so you do not have all your eggs in one basket, so to speak). We pride ourselves in selecting only the very best funds in a range of different asset classes and sectors (areas of investment and types of investment) that are in line with your agreed risk profile. We have a proven track record that our bespoke portfolios continually outperform the appropriate benchmarks, showing that we add value to our clients’ portfolios.

If a Stocks & Shares ISA is something you are interested in considering, or if you have one already that you would like us to review, please get in touch for a no-obligation meeting at our expense

Cash ISAs are where you receive a certain level of interest on your investment. For example, say you invest £20,000 earning an annual interest of 1%, you will receive interest of £200 on top of your investment each year. You tend to get better levels of interest by tying up your investment for a fixed period, of between 1 and 5 years.

General Investment Accounts (GIAs) are typically used for investment after you have maximised your pension and ISAs each year. They allow you to invest in the same investments as a pension or Stocks & Shares ISA, albeit with fewer tax advantages. They are usually used as ‘feeder’ accounts, to ISAs and pensions each year where new investment is not available (no excess cash to invest).

The funds within the investments are subject to Capital Gains Tax (CGT) upon sale or switching between funds, unlike an ISA or pension, albeit investors can use their annual CGT exemptions each year to help minimise tax consequences. All income from a GIA is also taxable as interest or dividends, depending on the income produced by the funds.

We can help you decide if a GIA is a suitable investment vehicle for you and discuss the tax consequences based on your own personal situation. Please get in touch for a no-obligation meeting at our expense

Investment Bonds, a form of ‘single-premium life insurance’ can either be invested ‘Onshore’ or ‘Offshore,’ which decides upon how they are taxed whilst the investment is in place and when money is drawn from them, or they are fully ‘surrendered’ (full withdrawal).

They are not the usual ‘go-to’ these days for new investments, unless there are specific reasons why they are suitable, such as for Trust funds or investing for children and grandchildren. Investment Bonds tend to be quite expensive to run and are only tax efficient for certain investors, depending on their tax status and goals.

However, there are still many Investment Bonds in existence, and they can be tax-efficient for the right purpose. Please get in touch for a no-obligation meeting at our expense if you wish to discuss Investment Bonds in more detail