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Allows people to invest on a tax-efficient basis. Every adult in the uk has an ISA allowance each tax year - current allowance is £20,000. A person can either invest the entire amount in a stocks + shares ISA, or split it between a cash ISA and a stocks + shares ISA in any proportion they like Stocks + shares Stocks + shares ISA Types Corporate + gov bonds Property People are advised that they should use a stocks + shares ISA only if they're willing to tie their money up for at least 5 years. This is because the value of the willing to tie their money up for at least five years. This is because the value of the ISA will fluctuate with changes in market values and the investor needs time to take advantages of periods when values rise. Shares = equities Buy a readymade product from a provider and let the provider manage the investment for them Investor can: People can invest their money themselves by choosing and buying specific assset ( shares / property ). but this isnt a good option for many small investors as they dont have enough money to allow them to spread the risks over a well- diversified range of asssets. They're als likely to have the knowledge or the time to select uitable shares, properties, etc, and to track their performance on a day-to-day basis. This is why many people choose to hand over their money to a specialist investor. Either a colllective or a fund. Funds can be specialist companies or they can be provided by banks. choose and buy their own shares and put them into what is known as an ISA wrapper 2.5.2 - stocks + shares ISA 2.5 - INVESTMENT PRODUCTS - ASSETS Using an ISA wrapper means that they can earmark shares up to the permitted limit for ISA's and receive a tax-free return on these shares, regardless of any other investments they may have ...
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