ISAs Explained
Here you'll find a simple explanation of ISAs. If you would like any further explanation,
please call our client helpdesk on 0800 597 2525 or email us at
invest@willisowen.com.
What is an ISA?
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.
Which type should I choose?
That depends on your own needs. Willis Owen provide access to Stocks and Shares
ISAs. 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.
How much can I save in an ISA?
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.
Can I invest in more than one fund within my ISA?
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.
Can I hold cash within my Stocks and Shares ISA?
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.
Can I transfer between fund managers during the year?
By applying for the funds through Willis Owen’s partner Cofunds, you will have the
flexibility to easily switch between over 1,000 funds available through Cofunds,
and maintain the tax benefits of your ISA.
When can I cash in my 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.