What is an ISA?
An Individual Savings Account (ISA) is a tax wrapper that allows you to save, either in cash or stocks and shares, without paying any tax on the money in the wrapper. This includes any returns/growth is tax-free. At SCM Direct, we only offer a Stocks & Shares ISAs, not Cash ISAs.
The Government tends to review and often increases the annual ISA allowance each year. For the 2022/2023 tax year, the allowance is £20,000.
A Stocks and Shares ISA could be for you if:
- You would like tax-free savings, including not paying tax on any capital gains and income (tax from dividend income is deducted at source and cannot be reclaimed)
- You are looking to invest for at least five years
- You haven’t used up your full ISA allowance for the current tax year
- You are over the age of 18, living in the UK with a UK bank account or building society
It is worth noting that the long-term annualised real return (i.e. the return after inflation) from investing in a mix of bonds, equities, and cash has shown it produces higher returns than cash savings accounts or Cash ISAs.
NOTE: Higher returns tends to be accompanied by higher risk.
See all SCM Investment Portfolio options
Find out your Attitude to Risk with our FREE Questionnaire
