How should I Invest?

The amount you have to invest, how quickly you need to get at the money in your investment and a number of other factors will guide us in advising you of your options.

The Cash Individual Savings Account (ISA), Stock and Shares ISA and investment binds are explained below. For further information and help please contact Jan.



Expert Financial Advice is Essential

How to invest your hard earned cash needs careful consideration. How much can you afford, what is your risk profile? Financial Advice is important.

You are advised to seek expert financial advice with investments.

Read on to learn more about Investments

Investment Savings Account – ISA

An ISA is a tax-free savings account, which means that they are usually free of both income and capital gains tax. You do not have to declare any income or interest you get from them. You can withdraw money when you want.

You can invest into two main types of ISA: cash and shares. In any one year, you can only open one stocks and shares ISA.

Cash ISA

This type of ISA is usually offered by lending banks and Building Societies. You can put in regular contributions or a lump sum up to your annual allowance for that tax year.

This type of plan allows you access to your money if you need it, but there might be penalties to pay if you take your money out early.

Cash ISA’s are safe investments as you know what interest rate you are likely to get on your returns when you take it out, and as it is not linked to the stock market your money is less likely to go down.


For tax year 2022-2023, every adult has an overall ISA allowance of £20,000 which can be split between a stocks and shares ISA and a cash ISA. 

Stocks and Shares ISA

This type of ISA allow you to invest in the stock market. They are more risky than Cash ISA’s as any movement in the markets will have an effect on your returns, meaning your investment can go down as well as up. This movement will depend on the level of risk you are willing to take.

The stocks and shares ISA can include unit trusts: these are open-ended investment companies (OEIC’s), investment trusts, corporate bonds and individual shares.

A Self-Select ISA allows you to choose investments that go into a tax free wrapper. A Managed ISA has an investment manager to look after the funds in the ISA.

ISA Advantages

Your investment may provide unlimited high returns. Wide choice of where to invest and the level of input into the management of your investments. You can manage risk. You can opt to invest in funds that share your values e.g. social and ethical investments.

ISA Disadvantages

The value can go down as well as up. There are usually fund charges and possibly exit fess when selling assets from your ISA. You are not shielded from inheritance tax or stamp duty when purchasing shares for a stocks and shares ISA.

Investment Bonds

An investment bond normally allows you to invest in a mixture of investment funds and allows you to spread your risk by investing in sectors and countries so as to coin a phrase “don’t put all your eggs in one basket”.

How Bonds Work

By spreading your risk you are not relying on one sector to produce your returns.

  • Bonds are usually medium to long-term investments, and are able to produce both growth and income for the client.
  • Investment bonds are single premium life insurance policies, meaning that a small amount of life insurance in provide with the bond.
  • Clients invest a lump sum of money into the bond they then choose to go for either growth or income.

Over the term of the plan, clients are allowed to take 5% of their original investment amount per annum from their bond for a maximum of 2 years tax-free. If they don’t take out their annual allowance this can be rolled over and taken in future.

As with all investments, these type of investments can fluctuate and you may not get back the full amount you invested.

Onshore and Offshore Bonds

The main difference is how tax rules are applied. Onshore bonds are from a resident UK company, with the bond subject to UK tax rules for a UK company. For Offshore (International) bonds, tax liability depends on many factors.

The choice of bond provides valuable tax planning opportunities.

Types of Bonds

With Profit Bonds

The “With Profit Bond” is a form of Life Insurance based investment. This type of bond usually requires the investor to deposit a lump sum. Most bonds are taken out for growth or income, and looked as medium to long-term investments.

The bond invests in a wide range of assets such as shares, fixed interest, property and corporate bonds. Your investment builds up with the addition of bonuses which are usually added each year, these are called revisionary bonuses. Once added they cannot be removed, and when the bond matures the product provider may pay our a terminal bonus but this is not guaranteed.

Unit Linked Bond

Unit linked investment bonds are investment bond plans which can offer the opportunity for better returns but with higher risk as your capital is not secure, as the investment is linked to movements in the stock market.

Unit linked bonds do not guarantee to pay out a guaranteed sum assured, your investment s made directly into the assets defined by the fund investment objectives.

The value of your investment can go up as well as down, and your may not get back the original amount invested.

Unit Trusts

A unit trust reduces your risk of investing in the stock market by pooling your investment with thousands of others. The Unit Trust provider then spreads this money across a wide range of shares and other investments.

Unit Trusts are very cost-effective for the client, the charges are a fraction of what would it would cost the client if they bought the shares themselves directly.

  • By diversifying your investments, a Unit Trust will spread the risk automatically.
  • Unit Trusts can be for both growth and income, they are viewed as medium to long-term investments.
  • Income from Unit Trusts is liable to income tax, and potentially capital gains tax if your personal allowances and reliefs are not extended.

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