If you are approaching the world of investments, you are probably gathering as much information as possible before diving in. Nowadays, the alternatives investors have at their disposal are really numerous and they can choose between different types of investments depending on their needs, but also considering their financial situation (earnings, savings, expenses) and the risk they are willing to tolerate. In this sense, especially if you have never made any investments before, it is important to plan a proper strategy after reading, learning and examining the various factors involved in the investment process. You can elaborate one by yourself or ask a professional for help. Among the various types of investments available today, citizens of the United Kingdom have the chance to choose ISAs. There are different types available: Cash ISA, Stock and Shares ISA, Lifetime ISA (LISA), Innovative Finance ISAs. These products allow to save or invest money in a tax efficient way, since they are excluded from both capital gains tax and income tax.

Opening an Individual Savings Account

Once understood what an ISA is and the different types of ISAs currently available for UK citizens, maybe you are asking yourself “how many isas can I have”? Well, if you meet the requirements, you can have all of them. What do you need? First of all, you must live in the UK and be 18 years old. To prove it an ID card is asked. Your ability to invest in an ISA depends on your specific situation, and all tax regulations are subject to revision. For the current tax year (2022–2023), you may save up to £20,000 with one account type or distribute the total across additional kinds. Do you need to know the location and the process necessary for opening your ISA? You can create an Individual Savings Account, or more, with the help of credit unions, stock brokers, banks, peer-to-peer lending services, crowdfunding businesses, building societies, or other financial organizations.

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Points and factors to think about

There are different kinds of Individual Savings Accounts, if you are thinking about opening one. Everybody who meets the requirements is qualified to save money in any of them. If you want to know more about the characteristics of ISAs, here you are some of them: 

– Multiple possible investment options: if you are not sure of how to allocate your money, Individual savings accounts (ISAs) allow investors to select among a variety of options. Depending on their preferences, people can choose gilts, stocks, bonds, fund shares, and other types of assets. What if you prefer cash? There is also an alternative offered for a safer profile, that is to say the Cash ISA.

– The opportunity of transferring the account: once an ISA has been opened, it may be moved to a different provider. For its whole existence, the original one does not need to be maintained. Switching from one company to another is a frequent procedure, especially when you are able to find better solutions with higher interest rates. Additionally, the funds may be transferred between ISAs of different kinds.

ISAs can be inherited: in a couple, if one of the two partners passes away, the other is entitled to inherit the account. In order to do it, an inherited ISA permit is necessary. What is that? It is a payment equivalent to the total amount paid up to that specific moment.

– The possibility of withdrawing money tax-free: the investors may take their money out of their ISA at any time and incur no fees. This does not apply in case the account has a fixed-rate account. Although, this is not advisable because it might significantly lower your revenues, especially at an early stage.

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