<\/p>\n
Stocks & Shares ISAs offer the possibility of higher returns than Cash ISAs, but only if you\u2019re prepared to take some risks with your savings. These investment accounts offer tax-efficient benefits, and while a Cash ISA is simply a tax-efficient savings account which offers capital security, a Stocks & Shares ISA lets you put money into a range of different investments.<\/p>\n
Make the most of your ISA allowance<\/strong> Because you can\u2019t carry over your ISA allowance into a new tax year, it\u2019s important to use it by 5 April each year. You need to bear in mind, though, that tax rules can change in future and that their effects on you will depend on your individual circumstances.<\/p>\n Don\u2019t obsess over timing<\/strong> If appropriate, a safer strategy can be to drip-feed money into your Stocks & Shares ISA throughout the year. Sometimes you might buy when the market is high, and sometimes when it is low, but over time the aim is for this to average out.<\/p>\n Time to make your decision<\/strong> Either way, your professional financial adviser can explain how funds work. These funds may invest in shares in specific markets, regions or industries, or in bonds, in property, in a combination of these, or in entirely different assets.<\/p>\n Match your investment goals<\/strong> Instead, select funds with a stated objective that matches your investment goals in terms of risk and return. Any investment involves an element of risk. But multiple factors can raise or lower the risk level of a fund, including the assets it invests in, the region, industries and companies it invests in, and the way it is managed. Consider all these factors.<\/p>\n Review your investments regularly<\/strong> While annual reviews of your investment strategy are wise, more frequent adjustments are not usually recommended. There are many reasons you might be tempted to adjust your investments. You might have heard of a well-performing stock that\u2019s offering unbelievable returns. Or you might have suffered a sudden loss and decide your existing investments are underperforming.<\/p>\n Investments, by nature, fluctuate in value<\/strong> Constantly moving funds can be stressful and ultimately unproductive. In most cases, you\u2019re better off sticking with your investments through ups and downs. Diversification (which can be achieved by investing in several unrelated funds) can also help to manage your risk level.<\/p>\n INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.<\/p>\n THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.<\/p>\n PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE.<\/p>\n<\/div>\n<\/div>\n Make the most of the tax breaks before it\u2019s too late If you hold a Cash Individual Savings Account (ISA) you may be dissatisfied with the low rates of interest you receive, which could make it difficult to grow your money even at a rate that keeps pace with inflation.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/3373"}],"collection":[{"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/comments?post=3373"}],"version-history":[{"count":0,"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/3373\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/media?parent=3373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/categories?post=3373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/tags?post=3373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nAll UK residents over the age of 18 receive an annual ISA allowance of \u00a320,000 (2020\/21 tax year). This is the amount you can pay into your ISA (or split between several ISAs of different types) to allow it to grow through interest, capital gains or dividend income, and you won\u2019t pay tax on these proceeds.<\/p>\n
\nWhen getting started, a common concern is that the market will fall just after you\u2019ve made a large investment. Some people make the mistake of trying to \u2018time the market\u2019 \u2013 buying in just before prices spike \u2013 which, while tempting, is very difficult given the unpredictable nature of investments.<\/p>\n
\nWhen you set up your Stocks & Shares ISA, you\u2019ll make some decisions about how your money is invested. How involved you are in your investment decisions varies between different ISA providers; some allow you to choose individual investments, while others provide ready-made portfolios.<\/p>\n
\nFunds tend to advertise themselves based on their past performance, so it\u2019s naturally tempting to choose those that have achieved the most growth in recent years. But past performance doesn\u2019t guarantee future performance and outstanding performance last year could be the result of a trend that will self-correct this year. Don\u2019t base your decisions on this factor alone.<\/p>\n
\nOnce you have made your investment selections, you should review your Stocks & Shares ISA regularly to make sure it still meets your needs, which may change over time. For example, if you hope to buy a house in ten years, you might initially choose higher-risk investments, but after five years you might want to reduce your risk level to protect your existing capital.<\/p>\n
\nIt\u2019s more helpful to recognise that investments, by nature, fluctuate in value. A sudden rise in one doesn\u2019t mean you should buy and a sudden fall in another isn\u2019t a sign you should sell \u2013 in fact, you may recoup that loss quicker by holding it.<\/p>\n
\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"