ISAs Explained

It’s an Individual Savings Account, the tax-exempt savings plan that replaced PEPs and TESSAs in April 1999.

An ISA is not itself an investment - it's a flexible 'wrapper' under which a wide range of investments can be made, free of capital gains or income tax. You can choose from two types of ISA – Equity (shares, bonds or funds based on shares or bonds), and Cash.

Equity ISAs are also known as Stocks and Shares ISAs.

That depends on your own needs. Willis Owen provides access to Stocks and Shares ISAs and a Cash ISA. If you are looking for long term returns (over at least five years) and are happy to take some risk with your capital then consider Stocks and Shares ISAs. If you are unsure then contact an Independent Financial Adviser.

Because they have tax advantages, there are limits on the amount you can contribute each tax year. Check the section ISA allowances for those that currently apply.

From the tax year 2009/10 onwards you may subscribe either to a Cash ISA or a Stocks & Shares ISA, or both, subject to limits. See the ISA Allowances section for an example.

By applying for the funds through Willis Owen’s partner Cofunds, you can include different funds within your ISA. Using Cofunds means you only need to fill out one application form and refer to one set of funds, key features, and terms and conditions. The usual Willis Owen discounts apply.

You may hold cash temporarily within a Stocks and Shares ISA, providing you intend to use it to buy stocks and shares. This can be a useful facility if you want to utilise your Stocks and Shares allowance for a particular year but delay the choice of investment for a short period, or if you temporarily want to switch into cash later on.

Willis Owen offer access to this facility through the Cash Reserve. You can invest up to the full ISA allowance in the Cash Reserve and then transfer the cash into the fund or portfolio of your choice at a time that suits you. Money in the Cash Reserve should be ‘destined for investment’, that is held for short periods only, and should be moved into investments when you have made your choice.

By applying for the funds through Willis Owen’s partner Cofunds, you will have the flexibility to easily switch between over 1,300 funds available through Cofunds, and maintain the tax benefits of your ISA.

At any time - there is no minimum period over which it must be held, and any gains derived are tax-free. However, as with all stock market investments, equity ISAs are best regarded as a medium to long term investment.