Stocks Shares Isa: What You Need To Know

Stocks and shares ISAs are a tax-efficient home for your savings.

One option that might be considered by those aged 18-39 is the Lifetime stocks and shares ISA, which includes a government bonus of 25% of any investment made each tax year. The maximum investment each year is £4,000.

It is worth bearing in mind that any investment in the stock market, whether managed on your behalf or otherwise, should be a long-term proposition. Many investment specialists recommend investing over a minimum five-year period. If you cannot tie up your money for five or more years, or if you cannot stomach the risk of getting back less than you invest, then a savings account is probably more appropriate for you.

The value of your investment and the income derived from it can go down as well as up and you may get back less than you originally invested. The tax advantages of ISAs may change in the future and depend on your individual circumstances.

In the 2019/2020 tax year, you can invest up to £20,000 into an ISA. This can be invested in cash or stocks and shares, or a combination of both.

A stocks and shares ISA offers the potential for higher returns than a cash deposit and you can invest in a broad range of assets including shares, bonds, commercial property, and commodities. But stocks and shares ISAs are riskier than cash plans. If the stock market crashes or the property market implodes, you could lose all your money, including your original stake.