Some people like to think of an ISA as a tax-efficient shopping trolley where you can place a selection of investments, including bonds, equities, property and cash, so they become tax-efficient – meaning your investment is free from personal income and capital gains tax.
Please note, an ISA is just a way of sheltering your money from tax – not an investment in its own right. And when you're deciding how to invest, it's important to remember that the value and income from the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested.
At M&G we offer Stocks and Shares ISAs (not Cash, Flexible, Innovative Finance or Lifetime ISAs). Here's a summary of how you'll benefit from investing in an ISA with us:
In the table below, you'll see how Stocks and Shares ISAs compare to Cash ISAs.
Please note, M&G do not offer Cash ISAs.
|Stocks and Shares ISAs||Cash ISAs|
|Designed for||Longer-term investments for five years or more, letting you share in the potential growth of the stockmarkets||Short-term savings for less than five years, with no real risk to your money. But the real-life 'spending power' of your investment may gradually fall if the interest rate you're getting is lower than the UK's annual rate of inflation|
|Maximum investment||£20,000 (2020/2021 tax year) - you can split your overall annual ISA allowance between Cash, Stocks and Shares, Innovative Finance and/or Lifetime ISAs as you wish||£20,000 (2020/2021 tax year) - you can split your overall annual ISA allowance between Cash, Stocks and Shares, Innovative Finance and/or Lifetime ISAs as you wish|
|Investment options||You can choose from a wide range of investments including funds, trusts, bonds and individual shares||With a Cash ISA there's no choice of investments – you'll simply get interest on your savings at a fixed or variable rate|
|Risks and returns||Depending on the performance of your investments, the value of your ISA can fall as well as rise||A Cash ISA offers very little risk to your money, with interest added every year, or sometimes more frequently|
|Taking your money out||You can normally withdraw cash from your account within eight to ten days||Variable interest accounts normally offer instant access. But with fixed term accounts, you could lose interest if you withdraw cash early|
MyM&G provides you with a great range of funds to choose from, plus all the benefits of over 85 years of investment experience and an active approach to investing.
We focus on helping you get the best from your money and enabling you to do all your investing in one easy place.
As mentioned above, ISA tax rules are set by the government, so they are subject to change at any time and the tax advantages they offer do depend on your individual circumstances.
When you save your money in an ordinary bank or building society up to £85,000 of your money is secure through the Financial Services Compensation Scheme, unlike a Stocks and Shares or bond investment.