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Everyone in the UK over 18 has a £11,880 ISA allowance. You can choose to use all of this for a stocks & shares ISA if you want, or you can put up to half of it in a cash ISA and the rest in a stocks & shares ISA.
As such, if you're looking to use your money within the next couple of years, you should probably stick to cash savings such as a cash ISA.
Should I use my cash ISA allowance or invest it all?
It depends whether you gain from the tax breaks above and if you're willing to risk your money investing. But in a nutshell:
- Basic rate tax payers who won't exceed the annual CGT allowance and are investing in stocks & shares - not corporate bonds - should ALWAYS max their cash ISAs first.
- Big investors, especially those putting money in corporate bonds, should ALWAYS max their stocks & shares ISAs.
- Only investing? ALWAYS max your stocks & shares ISA as it's often cheaper to invest within a stocks & shares ISA.
Investing in a stocks & shares ISA is a two-stage process. First you need to pick which provider to buy your ISA from, then you need to decide what investments to put it in.
Understand the charges of a stocks & shares ISA
Hargreaves Lansdown, the biggest provider, is now one of the most expensive
Lots of investors also like Hargreaves Lansdown for the depth of knowledge it provides, such as its Wealth 150 guide
Best Buys: New stocks & shares ISA provider
innovate wrote: »
MSE, have you heard of snowman's spreadsheet that allows people to compare platforms, based on their investment profiles?
oioisexy wrote: »
Could someone please help me understand how the percentage platform charge is applied, i.e. Cavendish Online 0.25% fee. Is it a the point of opening a fund or at the end of the year? Will I be charged the full annual 0.25% if I decide to move my funds to another platform or is it pro rata?
Also while I'm here, how do I buy individual bonds? I'm looking on Cavendish Online and all I can find are funds of bonds. Am I missing something?
BobQ wrote: »
I think the above comments are a trifle unfair. This is intended as guidance for the inexperienced.
For example, it is a fact that you cannot investing a fund unless you have a platform first.
BobQ wrote: »
For example, it is a fact that you cannot investing a fund unless you have a platform first. True that if you pick a platform first you may find the fund is cheaper on another platform but they do make the point that this might be the case.
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