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Maximise your money: secrets to tax-efficient savings

A Stocks & Shares ISA is a tax-efficient method of investing your money. Residents of the UK who are over 18 can invest £20,000 per tax year in ISAs. This can be invested in a single ISA or across both Stocks & Shares and Cash ISAs but together they must not exceed £20,000. Your money is likely to be invested into shares in equities e.g. individual companies, fixed interest securities e.g. government bonds, or a combination of both.

The biggest benefit of an ISA is that any investment growth is free from tax, as are any withdrawals. This includes dividend tax, capital gains tax and income tax. As previously mentioned, a total of £20,000 may be invested in ISAs in a tax year. It’s important to know that this amount cannot be rolled over into a future tax year.

You may now have to start completing self-assessment tax returns because of the interest you are earning on your savings accounts. Using an ISA means this is not a consideration as all interest and growth is tax-free. If your annual interest is exceeding £500 per tax year, it could be beneficial for you to get in touch.

Whilst any increase in investment value is tax-free, the value of your investment can go both up and down. Your capital is at risk and its value at withdrawal may be less than what you invested.

How Stocks & Shares ISAs differ from Cash ISAs

The different types of ISA that are available can be confusing. Below we’ve broken down the key differences:

  • The value of a Stocks & Shares ISA can go up and down. A Cash ISA has a guaranteed rate, so there is less risk with this type of ISA.
  • Stocks & Shares ISAs earn returns through dividends and the increased value of shares. A Cash ISA earns a pre-determined rate of interest on your savings
  • A Stocks & Shares ISA is a tax-efficient way of investing, whereas a Cash ISA is a tax-efficient way of saving

About a Willday Wealth Management Stocks & Shares ISA

With Willday you’ll be offered a choice of top-performing portfolios to invest in. Our team of personal investment consultants will work with you to tailor-make your portfolio based on your goals. We combine low fees with high-performing portfolios in order to keep more money in your pocket. You’re completely in control of your investments. You can withdraw and reinvest funds over the duration of the tax year, with no worry about penalty fees.

Do you have an existing ISA? You can transfer it to Willday Wealth Management to have all your investments looked after in one place. With Willday, there are no hidden costs or surprises, just one easy fee. We actively manage your investments to make sure your money is working for you in the best way possible.

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