Have you made the 
most of your ISA allowance?


Although the new tax year began back in April, it's not too late to make the most of your ISA allowance.

Investing in an ISA could be the ideal way to boost your savings, but the rules surrounding them may appear far more complex than they are. Here are five simple reasons to take advantage of this annual allowance.

Tax Free

An Individual Savings Account (ISA) acts as a ‘wrapper’ for a mixed bag of investments. Until 6 April 2018, you can use your annual ISA allowance to invest a maximum of £20,000 in the form of cash or stocks and shares. Investment returns that you receive under this wrapper will be free from tax for life, including dividends, interest, and any capital gains.

For under 18s, a maximum of £4,128 can be invested into a junior ISA. Any returns will also be tax-free, and while the funds cannot be accessed until they are 18, this may be valuable in providing a sound financial blanket for their future.

Remember this valuable allowance is available every year and therefore can be used to accumulate savings annually. Some ISA holders have been able to save hundreds of thousands in tax-free funds by getting into the habit of using their maximum ISA allowance each year.


Unlike pensions, ISA accounts provide flexibility. You can access funds at any time and have the choice between cash or stocks and shares. It is possible to move money either from stock and shares to cash or vice versa without losing you tax benefits.

Some ISA’s will even allow emergency access to your funds and your valuable tax benefits will be retained so long as the funds are repaid to the account before the end of the tax year in which the withdrawal was made. Please remember to check the flexible rules offered by your provider as they do vary and there is no obligation to allow them.


ISAs give you the freedom to mix and match your investments. For example, if you want to invest £2,000 of your allowance in cash and the rest in stocks and shares, you can. You can have separate ISA Managers for the cash and stocks and shares in the same year so long as you do not exceed your annual allowance. This allows you to shop around for the best interest rates available.

Investing in stocks and shares provides the potential to achieve better investment returns in the long run, but they do involve risk. If you are likely to need those funds in the near future or you do not want to see fund values fall as well as rise, then you may want to invest them in cash.


ISA provides a huge range of cash and stocks and shares to invest in. Whilst interest rates are at their lowest for many years you can source variable rates and fixed rates over most periods.

For those recognising the benefits of active investment for their long term savings ISA will provide almost every option of collective fund as well as individual securities for those who are more adventurous.

Collectives available will either be active funds with a fund manager who tries to invest in the right stocks at the right time to a defined objective or passive funds that will simply follow a recipe and invest in the constituents of an index such as the FTSE All Share Index. The options will also allow diversification across different asset classes and sectors in order to spread investment risk more widely and reduce risk.

It’s use it or lose it

Once the tax year is over on 5 April 2018, anything remaining of your current ISA allowance will be lost. Your new allowance will begin on 6 April 2018. Using your ISA allowance as soon as possible means that your invested for longer and you will have the rest of the year to enjoy the returns.

If you would like any more information on ISAs, or to discuss your financial portfolio with one of our IFAs, please do not hesitate to give us a call, or fill in the enquiry form below and we'll be in touch.

This article is for generic information only and should not be constructed as advice. Please contact us before proceeding with any course of action.

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