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Investing in ISAs

In a recent speech the Prime Minister warned that the budget in October would be ‘painful’ with ‘big asks’ being made of people. Exactly what those ‘big asks’ will be is not something which we can easily second guess at this moment in time. However, early indications are that areas such as capital gains tax, pension reliefs and inheritance tax are under scrutiny by the Treasury.

Although there has been some talk about potentially simplifying the ISA structure, to date the consensus amongst investment experts is that ISAs will broadly remain in their current form. In April 2024 nearly £750b was held in ISAs with the split being roughly 40/60 between Stocks & Shares ISAs and Cash ISAs.

Despite the popularity of ISAs, a survey by Paragon Bank revealed that in May 2024 there were 2.3 million fixed rate cash investments in the UK which sat outside of ISAs. Whilst some of these funds will have been invested by those who have already utilised their ISA allowance, Paragon comment that the tax-free nature of ISAs mean that some investors could be losing out on potential gains available through investing in an ISA vehicle. This is a comment echoed in another report by Quilter which highlights that individuals who invest outside of an ISA could potentially lose out due to their investments being subject to capital gains and dividend tax.

If you are looking for advice on investments or if your situation has changed and you may therefore need to review your existing pensions or investments, contact Beckworth by using one of the links on our website.