Common myths about ISAs
Are you making the most of your annual ISA allowance? If not, why not? Many people don’t use their allowance because they’re not sure what an ISA is or how it works.
Here's our round-up of some of the common ISA myths that could be stopping you getting the most from your savings and investments:
Myth 1: ISAs are complicated
ISAs are just like other savings and investment products - except any interest your money earns is sheltered from tax. There are two types of ISA, cash and stocks and shares. Cash ISAs work just like savings accounts, only there's no tax to pay on any interest you earn. If you have a stocks and shares ISA, you won't have to pay capital gains tax on any profits or further tax on the income.
Myth 2: you need a lot of money to invest in an ISA
You'll be able to save and invest up to £15,000 in a New ISA, up to the end of the current tax year, either through lump sums or smaller, regular payments.
Myth 3: I can't get at my money if I need it
Unless you choose a fixed term ISA, you should be able to withdraw your money at any time. Remember, if you've chosen a stocks and shares ISA you should aim to invest for at least five years. Check if there are any withdrawal charges or restrictions before you decide which ISA to choose.
Myth 4: once you've opened an ISA, you're stuck with it
If your ISA isn't performing as well as you'd hoped, it's easy to transfer to a new provider just by filling in a form.
Myth 5: you can't have a cash ISA AND a stocks and shares ISA
You can have both! You'll be able to choose a New Cash ISA, a New Stocks and Shares ISA or a combination of both.