Individual Savings Accounts (ISAs): How ISAs work

A guide on the advantages of ISAs

Take me to the Signia ISA

ISA allowance: ISA limits & rules

An Individual Savings Account or ISA is a tax-efficient way to save for the future. Each year the government sets an annual allowance which is the maximum you can put into an ISA in any given year. This year you can invest your £20,000 allowance into a Stocks & Shares ISA and any gains you make will be free from tax.

1

Allowance

This tax year (2020/21) you can invest up to £20,000 in ISAs.
2

Tax-free*

Any returns from your ISA investment are tax-free* and to ensure simplicity there is no need to declare ISAs on your tax return.
3

Choice

There are 4 main ISAs available on the market, these are Cash ISAs, Stocks & Shares ISAs, Lifetime ISAs and Innovative Finance ISAs. You can subscribe to one each, per tax year, providing you don't exceed the annual allowance.
4

Don't lose your allowance

At the beginning of each new tax year your annual ISA allowance resets. You cannot carry your allowance over between years, so if you don’t use it you lose it.
5

Transfer your ISA

You can transfer unlimited amounts from current ISAs to the Signia ISA making them easier to manage, reducing fees and giving them a better chance to grow.
6

The Signia ISA

You can open a stocks and shares ISA with Signia Invest, provided you haven't opened the same kind of ISA elsewhere this tax year.
*The tax benefits will depend on your individual circumstances and tax rules are subject to change by the government.
Discover the Signia ISA

At Signia Invest we're proud to offer flexibility for our clients, whether you're looking to lock your money away for generous returns or require more short-term cash alternatives that provide greater protection and accessibility - At Signia Invest you can grow your wealth the way you want to.

Carnegie SmythSignia Invest Founder
Carnegie Smyth Signia Invest Founder

The Signia ISA – an easy and tax-free way to save or invest for the future.

  • Ready made portfolios to match your appetite to risk
  • Managed by our awarding winning team

What is an ISA?

An ISA or an Individual Savings Account provides investors or savers a way to receive any returns on investments held in their ISA tax-free. There are 4 main ISAs on the market that are available, you can subscribe to 1 each per tax year providing you are within the annual allowance which is currently £20,000.

The Signia Invest ISA is a stocks and shares ISA. Tax treatment does depend on the individual circumstances however any returns held within your Signia Invest ISA, are free from income and capital gains.

The different ISAs in more detail:

A cash ISA works in the same way as cash savings account and are ultra-low risk. As a result, any interest rates paid on cash in an ISA are typically very low and closely linked to the Bank Of England (BOE) Interest Rate and the Consumer Price Index (CPI).
A Stocks and Shares ISA allows you to hold investments traded on the stock market. You will usually pay a fee or a commission depending on the route you take, and the interest will fluctuate due to a number of factors including the nature of the underlying investments held in the account.
The UK Government introduced the innovative finance ISA on 6th April 2016. The IFISA was born from the credit crisis in 2008 which led to an increased demand from UK businesses for short to medium term credit facilities, which the banks are unable to meet.
The lifetime ISA is used to buy your first home or to save for later life. You must be under 40 to open a Lifetime ISA. The contribution is capped where you can put in up to £4,000 each year, until you’re 50. The government will add a 25% bonus to your savings or up to a maximum of £1,000 per year.

How much can I invest in an ISA

Each tax year, individuals have an allowance that can be paid into ISA accounts, for the current tax year (2020/21) the allowance is £20,000 (for ISA accounts and £9,000 for JISAs).

This can be invested into one ISA or split between the different ISA types.

Crucially, any unused allowance doesn’t roll over – so if you don’t use it, you lose it – forever.

Any savings or investments which stay within the tax-free ISA wrapper will continue to earn interest and benefit from the tax benefits until you withdraw the money. This means it’s possible to have considerable amounts held within an ISA, as some people will take advantage of the maximum allowance each tax year.

Transfers – Any money already in an ISA wrapper can be transferred and will not impact the annual allowance or tax-free status.

Who can open an ISA?

You need to be a UK resident aged 16 or over to open a cash ISA, or aged 18 or over to open a stocks & shares ISA or innovative finance ISA. You can’t open an account with someone else, or on behalf of someone else.

The Signia Invest ISA is a stocks and shares ISA, therefore anyone wanting to subscribe has to be a UK resident aged 18 or over.

What is a stocks and shares ISA?

A Stocks and Shares Individual Savings Account or ISA is a savings vehicle through which you can invest in a number of UK and international investments, tax efficiently. Any profit you make on your investments is tax-exempt. A Stocks and Shares ISA gives you the opportunity to choose which investments you hold, within the regulations.

You have the choice as to how to select and manage your investments held in Stocks and Shares ISA;

  • You can do it yourself and self-select the funds
  • You may use an adviser who will identify suitable investments for you that meet your objectives and risk profile

At Signia Invest, we have created a number of ready made portfolios for you with different investment strategies to make it easy for you to select which investments best suit your needs.  Simply choose a portfolio that matches your level of risk/return and how long you’re happy to lock your funds away.

Will I be taxed on my ISA*?

ISAs provide preferential tax treatment which means investors:

  • Do not have to declare any income or capital gains on a self-assessment form.
  • Any returns earned on any investments held in an ISA will be received gross and will not be subject to capital gains or income tax
  • When selling investments any losses are not included for capital gains tax purposes

*The tax benefits will depend on your individual circumstances and tax rules are subject to change by the government

Why choose Signia for your ISA?

Experience

With more than 180 years of industry experience amongst them, our team are experts in risk management, fund selection and derivative markets. Our aim is to develop and maintain trust, and that can only be achieved by meeting your expectations and delivering consistent performance.

Flexibility

To make saving easy we'll invest for you through a stocks and shares ISA, SIPP or General Investment Account set up to suit your tax preferences. If you are looking for a straightforward, low-cost way to invest and grow your money, they could be right for you.

Easy Investing

We offer a choice of portfolios designed to give you one-stop access to markets. Simply select the investment strategy that suits your investment goals and attitude to risk.

The Signia ISA – an easy and tax-free way to save or invest for the future

  • Ready made portfolios to match your appetite to risk
  • Managed by our awarding winning team