Stocks And Shares Isas

By Author: Lecia Selbo
Total Articles: 49
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When ISAs were created over a decade ago they were an immediate success. The ability to save your money away in a place where it didn''t have to be taxed made them very popular and they remain one of the principal forms of saving to this day.

To help people to save in the wake of the recession, last year the Chancellor announced that the ISA allowance would be increased by ?3,000. The over-50s were able to take advantage of this change from October 09, whilst for the rest of the population it the new allowance arrives in April.

Recent statistics have already suggested that the average British consumer is looking to save more, so the shake-up in ISA allowances comes at just the right time. Still, many people only use half of their ISA capacity. Cash ISAs are very simple and straightforward, it''s relatively easy to compare rates and to make a decision on who to go with, yet they only make up a maximum of half of the overall allowance.

ISAs are split into two broad options, cash ISAs, and stocks and shares ISAs. The former can make up half of your overall allowance, with the latter making up the rest. Just ...
... like cash ISAs, stocks and shares ISAs are tax free and you do not have to declare them on your tax return.

Despite this, many people choose not to invest their money in stocks and shares ISAs. The reason for this seems to be that there is a general distrust of most things connected to the stock market, and everyone knows that investments can decrease as well as increase in value.

Another major reason is that there is a massive amount of choice and people can find themselves bewildered by the range of opportunities before them. Major suppliers like Legal and General offer a wide range of options, but as people don''t know what they''re choosing, they often don''t make a choice at all.

It is the wide range of options which actually makes stocks and shares ISAs a good idea. Some ISAs allow you to include shares on the stock market, others use only managed funds to reduce the risk. You can choose the level of risk that you want to expose your investment to (although obviously that is inversely balanced against the amount of potential reward).

If you have used up the cash aspect of your ISA allowance, stocks and shares ISAs remain a great place to invest, even if you''re not too sure about the stock market. You can always sell any investment in an ISA and the cash doesn''t have to leave the allowance providing you reinvest it, and with the stock market set to perform relatively well this year, if you do invest you may find that you get a really good return on your stocks and shares ISA. Lecia Selbo opened a stocks and shares ISA with Legal