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The Stocks and Shares ISA products and funds available from SFS Invest Direct are not like building society / bank deposit accounts, as they can rise and fall in value and your capital is at risk.

Please note: the tax treatment of any investments depends on your individual circumstances and may be subject to change in the future.

Guides
Individual Savings Account

SFS Invest Direct
Guide to ISAs

SFS Invest Direct Guide To ISAs Download the PDF Guide
Click below for the answers to the most asked ISA Questions.

What is an ISA?

ISA stands for Individual Savings Account. ISAs are the Government’s way of encouraging you to invest in stocks and shares (or in cash if you prefer) by allowing tax benefits. They were introduced in 1999, effectively replacing PEPs and TESSAs.

Many people think of ISAs as investments in their own right. However, in the simplest terms, they are tax-efficient ’wrappers’ which are placed around investments to give excellent tax benefits, in addition to those potentially provided by the same investments if they were held directly.

Why should I buy an ISA?

At SFS Invest Direct we believe that tax-efficient savings such as ISAs should form the bedrock of everyone’s financial plans. If you put your investment in an ISA then it will benefit from the tax efficiency the ’wrapper’ provides. Another big benefit for those who don’t like paperwork is that you don’t need to include your ISA details on your tax return.

ISAs provide both novices and experts an easy way to invest in the stock market.

Who can invest in an ISA?

If you are an individual aged 18 or over and a UK resident looking for a tax-efficient home for your savings then an ISA could be right for you, as long as you haven’t already used up your ISA allowance for this tax year!

When can I buy an ISA?

The Government allows each individual one ISA allowance each tax year. Each tax year ends on 5 April.

To take full advantage of your allowance, you should buy your ISA as early as possible in the tax year.

How much can I invest in an ISA?

An ISA saver will be able to invest in 2 separate ISAs in each tax year. You can invest in a Cash ISA and a Stocks and Shares ISA and the maximum combined investment amount into both in the current tax year is £10,680.

Cash ISAs

A maximum of £5,340 can be placed within the cash element of an ISA. The remainder of the £10,680 can be invested in a Stocks and Shares ISA, with either the same or different provider. Cash ISAs cannot currently be purchased through SFS Invest Direct.

Stocks & Shares ISA

You can only have one Stocks and Shares ISA per tax year, in which you can invest up to £10,680.If you have a partner they can also use their personal £10,680 allowance, therefore as a couple you could invest a maximum of £21,360 into ISAs.

How often can I invest in a tax year?

You can invest either a lump sum or make monthly contributions up to the ISA allowance limits within a tax year.

Stocks & Shares ISA

This year’s limit for a Stocks and Shares ISA from 6 April 2011 is £10,680.

Through SFS Invest Direct the minimum that you can invest is a lump sum of £1,000 or a monthly minimum amount of only £50 per fund.

How long should I invest for?

Stocks and shares should be seen as medium to long-term investments, and you should always consider investing your money for at least five years, preferably longer.

Can I switch between funds?

Once you have bought your ISA you will have an online account. You can then go online and sell shares in one fund and use the proceeds to buy shares in another within your ISA without losing any of your tax benefits. This is called switching.

What are the charges?

There are often two types of charges which are payable when you take out an investment of this nature, an Initial Charge and Annual Management Charge. As noted previously, there is 0% initial charge when you transact via SFS Invest Direct. However, your investment will be subject to an Annual Management Charge.

Can I withdraw from my ISA?

You can make withdrawals from your ISA at any time without loss of the tax advantage. However, once you have subscribed the maximum amount to your ISA in a tax year, you cannot make any further investments until the following tax year, regardless of how much you withdraw.

The investment products available through sfsinvestdirect.co.uk, are not like bank or building society accounts as they rise and fall and your capital is at risk.

Can I re-register my existing ISA?

Most ISAs can be transferred. For further information visit the ’Consolidate My Investment’ area of the site.

What about the risks of investing in shares?

Stock market investments are subject to greater risk than, for example, a building society account and the initial capital and returns are not guaranteed. Consequently, if you are unhappy with the prospect of losing all or part of your capital you should not invest. Generally, the level of investment risk and potential reward go hand in hand.

I’ve read the guide but I’m still unsure, can you help?

If you are at all unsure about making an ISA investment or choosing a suitable fund please contact Skipton Financial Services on 0800 012 1249 to see whether it is worthwhile seeing one of our financial advisers.