Shares ISA - Clarification regarding the protection needed

Coume

Morning,

I am a tiny investor in comparison to most I guess but my Share ISA still hold most of my savings and it was doing pretty well before the last 10months or so

I purchased my ISA through fund supermarkets 30% through Fidelity and 70% through H-L. My Shares ISA is spread over 11 funds with Allianz, Fidelity, INVESCO PERPETUAL, Guinness, New Star, Sarasin and Schroder.

Anyway, I read the article 'Are your savings safe?' http://www.moneysavingexpert.com/savings/safe-savings but I am not sure to understand this part:

It's important to understand, we're talking about ‘saving’ not ‘investing’; if you put money in stocks and shares, funds that invest in them, and pension funds, then you’ve got a “risk based” investment NOT savings, and a different level of protection applies. If the product provider of an investment goes bust (e.g a bank offering a Shares ISA), you'll get the first £30,000 back, plus 90% of the next £20,000 (a total of £48,000); while pension and life assurance funds get the first £2,000 fully covered, plus 90% of everything else in them.

Does that mean that the money I invested through Shares ISA is protected? I always believed that a protection was only available to Cash ISA and savings.

If Shares ISA are indeed protected, which value is protected? The invested value or the valuation at the time of the collapse of one of my investment bank?

Thanks in advance for your clarification.
Ludo

Milarky

What's 'protected' is the cash-in value on any particular day. And with investment that value is going up and down every day anyway.

So if your ISA investements are never valued above £30K anyway '100 percent' of this is assured to be paid to you. But if your investments range between £30K and £50K then - in the event of the manager getting into difficulty (not connected with market troubles, note, just the manager) then you will not receive 10% of the final valuation above £30K - because that is not protected.

The distinction is between 'money' in the market (always at risk) and the 'investment account' (the 'money' in your account with the manager, valued at market prices) which the manager may not be able to payout in full even if he is free to sell the investments for you at their full value.