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Investment ISAs
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Latest Savings News
The £250 voucher which launches each fund should be boosted to £288 to keep up with inflation, the firm says.
20 Aug 08
With savings accounts rates unusually high, people who dip in to their accounts to fund their trips are missing out on £3 billion a year in interest.
19 Aug 08
Many child trust funds are allowed to expire by parents, new analysis from the financial firm has shown.
18 Aug 08
The impact of a heart attack is well known - but new analysis calls for its impact on pension savings to be taken into consideration, too.
15 Aug 08
Saving up to buy a big-ticket item - or even just to spend on a whim - is becoming preferable to using credit for many.
15 Aug 08Popular Related Articles
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Fund ISAs Explained
Fund ISAs reduce the risk associated with investing in stocks and shares by spreading your savings across a range of different investments managed by specialist advisers. You can invest up to £7,200 a year in funds under the protection of the tax free stocks and shares ISA umbrella..
By investing in fund ISAs you get to take advantage of the potential benefits associated with long term investment in the stock market without paying income or capital gains tax on your returns. Consequently it is not necessary to declare the funds you hold in ISA accounts on your tax return.
There are a huge variety of investment fund options available. These range from the higher risk growth funds to lower risk tracker fund investments. Growth fund ISAs are usually managed by financial advisers and aim to increase the basic value of the investment by buying shares of companies predicted to grow rapidly. Because of the associated risk these are very much a long term investment and may be subject to high management fees.
Alternatively tracker funds aim to follow the fluctuations of the stock market as a whole by tracking indices of performance such as the FTSE100. These can be a good option for inclusion in fund ISAs as management fees tend to be minimal. Additionally, although your investment won't grow above the rate of the stock market, it is unlikely to be outperformed either and so attracts less associated risk. It is also possible to use your ISA allowance to invest in a mix of property funds and corporate bonds.
It is important to remember that there is always a degree of risk associated with investing in the stock market. However by choosing a spread of lower risk investments such as bonds, tracker or property funds, although the potential for extreme growth is reduced, the level of risk on your initial investment can be minimised.
The tax free status of fund ISA investments gives even the most notice investor the opportunity to begin to build a strong savings portfolio.
