Flexible ISA Stocks and Shares Investment Guide

A Flexible ISA can be a great way to grow your money over time, and one of the most popular options is the Stocks and Shares ISA.

You can invest up to £20,000 in a Stocks and Shares ISA each tax year.

Investing in a Stocks and Shares ISA can be a relatively low-risk way to grow your money, but it's essential to understand the risks involved.

The value of your investments can go down as well as up, and you may get back less than you put in.

You can choose from a wide range of investments, including shares, bonds, and unit trusts, to create a diversified portfolio.

An ISA, or Individual Savings Account, is a great way to invest up to £20,000 per year. You can invest in a wide range of funds, shares, investment trusts, and exchange traded funds.

One of the best things about ISAs is that you don't pay income or capital gains tax on any money your investments make. This means you can keep more of your hard-earned cash.

You can start investing in ISA stocks and shares with as little as £25, either as a lump sum or regularly.

The ISA allowance for the 2024/25 tax year is £20,000, and this is shared across all ISAs you pay into during the year. You can choose to invest this amount in a variety of stocks and shares, including funds, exchange-traded funds, investment trusts, bonds, and shares.

To get started, you can select from our ready-made investments, which are designed for novice investors, or go the DIY route and choose from our full suite of investments. You can also mix and match to build the portfolio that suits your goals.

Here are some common investment options:

So, let's talk about flexible ISAs. These are designed to prevent you from being penalized if you need to access your savings.

You can withdraw money from a flexible ISA and pay it back in without losing interest or incurring charges, as long as you do so in the same tax year.

This is a big advantage over non-flexible ISAs, where you'd be stuck with a strict deposit limit of £20,000, no matter how many withdrawals you make.

For example, if you deposit the full £20,000 at the beginning of the tax year, then withdraw some of it at a later date, you can put the money back before the end of the tax year without any financial or tax penalty.

You can even withdraw money from one type of ISA, like a Cash ISA, and deposit it into another type, like a Stocks and Shares ISA, as long as it's done in the same tax year.

However, keep in mind that withdrawals from some Stocks and Shares ISAs may incur fees, so be sure to check with your provider before making any moves.

Here are some examples of how flexible ISA rules work:

If you're new to investing or just want more control over your portfolio, the DIY option is a great choice. You can build your own portfolio from thousands of funds, ETFs, investment trusts, and shares.

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With DIY investing, you can select your investments before opening an account. Our ready-made investments are designed for novice investors, but you can also go the DIY route, choosing from our full suite of investments. You can mix and match to build the portfolio that suits your goals.

You can start investing from as little as £25, either as a lump sum or regularly. There's a limit on how much money you can pay into ISAs every year, with a shared allowance of £20,000 for the 2024/25 tax year.

Here are the types of investments you can choose from:

Remember, you can always mix and match these investments to build a portfolio that suits your goals and risk tolerance.

The flexible ISA is a game-changer for UK savers, potentially adding an extra £3 billion to their savings over the next five years, according to HMRC data.

Having a flexible ISA can actually encourage people to save more, as they feel more confident in accessing their money without damaging their tax savings.

This is a great way to help bridge the savings gap, which is why the Government introduced it in the first place.

Easy Access Cash offers flexibility and accessibility to savers. You can open an account with £0, making it accessible to everyone.

The Trading 212 ISA has an account opening balance of £0, allowing anyone to access it. This is a great option for those who want to start saving without any initial deposit.

Marsden Building Society offers the top rate for unlimited withdrawals, making it a great choice for those who need to access their money frequently.

According to HMRC data, the flexible ISA could be worth an extra £3 billion to UK savers over the next five years. This highlights the importance of having easy access to savings.

Here are some easy access cash ISA options:

The flexible ISA has been a game-changer for many UK savers. According to HMRC data, it could be worth an extra £3 billion to them over the next five years.

Flexibility often has the opposite impact that many would expect, making us more likely to use our savings if we believe we can access them without damaging our tax savings.

If you're looking for a flexible ISA, you're in luck - several providers offer this option. Some institutions offer flexibility on all ISA products, while others come with exceptions and limitations.

The government has introduced the flexible ISA, but it's up to the provider whether or not they make this possible. Unfortunately, several stocks and shares ISA providers don't offer this flexibility.

Some flexible ISA providers may charge extra withdrawal fees, while others limit how much money you can withdraw each month. This can be seen as unfair practices, as individuals shouldn't be penalised for taking their money out when needed.

If you want to find the best flexible ISA that comes without unnecessary fees, you may want to change providers. Here are some main providers that offer flexible ISAs, with any limitations you should be aware of:

Fees and charges are an essential part of investing in flexible ISA stocks and shares. You'll incur a service fee from Willis Owen, which covers account administration, platform maintenance, and independent investment research.

The service fee is calculated daily and deducted monthly, with the rate depending on your overall balance. For balances up to £50,000, the rate is 0.40%, equating to £200 per annum, and for balances between £50,001 and £100,000, the rate drops to 0.30%, or £150 per annum.

Here's a breakdown of the service fee rates:

You'll also need to consider investment charges, which are taken directly from the capital or income generated by the funds you invest in. These charges vary from fund to fund and can be found in the fund's Key Information Document.

You'll incur a Willis Owen service fee, which covers account administration, platform maintenance, and independent investment research. The service fee is calculated daily and deducted monthly, based on your overall balance.

The service fee is tiered, with different rates applying to different balances. For balances up to £50,000, the rate is 0.40%, equating to £200 per annum. For balances between £50,001 and £100,000, the rate drops to 0.30%, or £150 per annum.

Here's a breakdown of the service fee rates:

Investment charges are taken by fund managers and cover things like expert fund management, administration costs, and custodianship fees. These charges vary from fund to fund and can be found in a fund's Key Information Document.

Trade fees apply when buying and selling shares, investment trusts, and exchange-traded funds, and are £7.50 per single transaction. There are no trade fees for buying or selling other types of funds.

Discover more: How Do You Trade Shares on the Stock Market

If you buy shares or investment trusts, you'll be subject to UK Stamp Duty at a rate of 0.5% of the value of the trade.

You'll also pay a £1.50 levy if you buy or sell shares or investment trust holdings worth more than £10,000. This is called a PTM (Panel of Takeovers & Mergers) levy.

This levy doesn't apply if you buy or sell units/shares in funds or exchange-traded funds.

Keep in mind that these taxes and levies don't apply to all types of investments, so it's essential to understand the specifics of your investment choices.

A simple calculator is available to give you an idea of how much your fees and charges could be for your first year of investing in funds.