How does an ISA work

An ISA (Individual Savings Account) is a tax-efficient way for you to save or invest. There are four types of ISA - Stocks & Shares ISAs, Cash ISAs, Innovative Finance ISAs and Lifetime ISAs.

Each year, you can save or invest up to a certain amount in an ISA - known as the ISA allowance. This is currently set at £20,000 for 2019/2020. You can read a bit more about how to best use your allowance by reading our article.

You need to be 18 or over and a UK resident to open an ISA with us.

What is a Cash ISA?

It’s basically a savings account where you don’t pay tax on any interest you earn. So if you have any savings it can be good idea to start with a Cash ISA.

What is a Stocks & Shares ISA?

It’s a tax-efficient investment account that lets you put your money into cash and/or different types of investments. With Stocks & Shares ISAs, any returns you make will be tax-efficient. 

Remember, as with any investment, the value of your fund can go down as well as up, and may be worth less than you paid in.

Compare ISA types here

 Stocks & Shares ISACash ISA
Where does my money go? Into funds or directly into investments such as shares or bonds. It's a type of savings account where your money is saved as cash.
How long do you need to be prepared to save for? Medium to long term. This normally means at least five years. Up to you – there’s no recommended timescale.
How much can you save each year? This depends on the ISA allowance. For 2019/2020 this is £20,000. This depends on the ISA allowance. For 2019/2020 this is £20,000.
Is it tax-efficient? Greater potential for your money to grow tax-efficiently if invested. You won't pay tax on any interest earned from cash savings.
Is there any risk? You need to be prepared to take some investment risk as you are choosing to invest in financial markets. There’s no investment risk but the amount you have saved may be affected by inflation.
How much do you need to know about investments? Many providers offer ready-made funds if you don’t want to be a DIY investor. Nothing. Your money isn’t invested.
Can I access my money? Yes - unless you’ve chosen a fixed term ISA. There could also be a delay for a small number of investment options. Yes - unless you’ve chosen a fixed term ISA.
Can I transfer other ISAs into an existing Standard Life Stocks & Shares ISA? You can transfer an existing Stocks & Shares ISA and/or a Cash ISA to a Stocks & Shares ISA with us without any loss of tax status. We can't currently accept a transfer from either an Innovative Finance ISA or Lifetime ISA You can instruct us to transfer an existing Stocks & Shares ISA and/or a Cash ISA to a Stocks & Shares ISA with us without any loss of tax status. We can't currently accept a transfer from either an Innovative Finance ISA or Lifetime ISA

 

Laws and tax rules may change in the future. This information here is based on our understanding in April 2019. Personal circumstances also have an impact on tax treatment.

We offer a Stocks & Shares ISA

With a Standard Life Stocks & Shares ISA you can save for the future and invest in a way that suits you best. With our Easy ISA we look after the investments for you, or with our DIY option you can pick and choose your investments yourself.


Set up a Stocks & Shares ISA


You will get to choose if you want the Easy or DIY option when you set up your new ISA.

 


This ISA is arranged through and provided by Standard Life Savings Limited.


For more information about other ISA's:

You can find out a bit more about which type of ISA could be right for you by reading our article.