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Posted on: 09 Nov, 17

Stock markets may be a riskier home for your savings, but higher rewards may be possible if you plan and take a longer-term view. Over longer periods, stocks and shares tend to deliver a superior return to cash, despite periodic bouts of volatility.

If you’re starting to think about investing, Individual Savings Account (ISAs) could be a good place to start. For many people, one way to invest in stocks and shares is through an ISA. But there’s no substitute for professional financial advice, which is essential to ensure that an assessment of your personal circumstances and attitude to risk is made before making investment decisions. So whether you’re a novice or an experienced investor, we can help you get the most from your 2017/2018 ISA allowance.

Wrapping up your investment portfolio

A Stocks & Shares ISA is a ‘tax-efficient wrapper’ that can be put around a wide range of different investment products. You should be planning on investing for at least five years and be comfortable with the fact that the value of your investments can go both up and down and that you might get back less than you invested.

There are two ways you can go about investing your Stocks & Shares ISA allowance, which for the 2017/18 tax year is £20,000. A tax year runs from 6 April one year to 5 April the following year. You can invest with lump-sum contributions, or you can drip feed your money into the markets on a regular basis. The annual Stocks & Shares ISA allowance is subject to review, and the Government’s favourable treatment of ISAs may change.

You can invest regularly in one of two ways within a Stocks & Shares ISA. You could drip feed your allowance in over time, making adhoc contributions, or set up a Direct Debit to make monthly contributions.

One advantage of making regular monthly contributions is that you can adopt a strategy known as ‘pound-cost averaging’ – so as markets invariably fluctuate over time, some of your monthly investments will take advantage of lower asset prices. The effect is that you will smooth out market volatility.

To hold an investment ISA, you must be 18 years or older and resident in the UK for tax purposes. Your yearly Stocks & Shares ISA allowance expires at the end of the tax year, and any unused allowance will be lost and can’t be rolled over to the following year. You can only pay into one Stocks & Shares ISA in each tax year, but you can open a new Stocks & Shares ISA with a different provider each year if you want to.

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