Stocks and Shares ISA

As well as the cash ISA allowance investors also have the opportunity to invest money in a stocks and shares ISA each year. Like a cash ISA all income like dividends and all capital gains are tax-free. (Interest on any cash held in the stocks and shares ISA is subject to a flat charge of 20%.) Investors are only permitted to invest their Stocks and Shares component with a single financial institution in any year. The current ISA limits in the UK are for people aged over 50 £10,200 of which £5,100 can be saved in cash. From 2010-11 these limits will apply to everyone. For those under 50 the ISA limits in 2009-2010 are £7,200 of which £3,600 can be saved in a cash ISA. What this means for say an ISA saver under 50 is that you can put £3,600 in a cash ISA and also put another £3,600 away in a stocks and shares ISA thereby doubling the amount of money you have managed to escape UK taxation on. If you were to say put £2,000 in a cash ISA you would then be able to put £5,200 in a stocks and shares ISA etc. Many of the stocks and shares ISA providers allow you to set up a regular monthly payment if you can't or don't want to invest the full amount at once. It is important to remember with an ISA that you are not allowed to exceeed to governments cash isa limits or invest more than the total isa limit each year. With a stocks and shares ISA wrapper you can choose an ISA wrapper that allows you to invest indivisually in your chosen stocks and shares or you can use one of the investment firms that will make the investment decisions for you like with the virgin climate change ISA or one of the various ISA's that Legal & General offer.