Rumours suggest Jeremy Hunt could reform ISAs in the upcoming autumn statement, one option being to increase the Stocks and Shares ISA allowance.
More than one in four Stocks and Shares ISAs were opened with the full £20,000 ISA allowance in the 2020/21 tax year (the last tax year for which figures are available). So, this would be positive news for some investors.
ISAs have always been one of the most tax-efficient ways to invest. And following changes to dividend allowances and capital gains tax (CGT) at the start of this tax year, they’re arguably more important today than any time in recent history.
On 6 April 2023, the annual CGT allowance was cut from £12,300 to £6,000. This will lead to us collectively paying £17.8 billion in CGT in the 2023/24 tax year, equivalent to £620 per household.
And this is only likely to go up as from April 2024 the CGT allowance is set to fall again to £3,000.
We don’t know yet if any ISA changes will happen. So right now, you don’t need to be too worried about what this means for your own savings and investments.
However, it’s worth keeping your eye on developments from a government that seems keen to make major changes to the ISA regime. And to consider whether you’re making the most of the ISA opportunities open to you right now.
Where have our Stocks and Shares ISA clients invested their money so far this tax year?
Here’s a look at the most popular actively-managed funds trying to beat the market and tracker funds trying to track the market, by HL's ISA investors from 6 April to 2 October 2023.
This article has been written independently of our investment research team to offer some inspiration. But it’s not personal advice or a guide on how or where to invest.
You should choose investments based on your own objectives and attitude to risk. If you're not sure whether an investment is right for you, ask for financial advice.
| Most popular active funds (number of buys, minus sales) | Key Investor Information |
|---|---|
| Fundsmith Equity | KII |
| HL Global Corporate Bond* | KII |
| Rathbone Global Opportunities | KII |
| Jupiter India | KII |
| Jupiter Asian Income | KII |
| Most popular tracker funds (number of buys, minus sales) | Key Investor Information |
|---|---|
| UBS S&P 500 Index | KII |
| Legal & General US Index | KII |
| Legal & General International Index Trust | KII |
| Fidelity Index World | KII |
| Legal & General Global Technology Index Trust | KII |
Investments by Direct Debit are excluded. *HL Global Corporate Bond is a new fund and launched in July.
How to pick investments for an ISA
Investing in these funds won't be right for everyone. Only invest in a fund if its objectives align with your own, and there's a specific need for that type of investment within your portfolio.
Investors should understand the specific risks and charges of a fund before they invest and be investing for the long term (five years or more).
It's also important not to put all your eggs in one basket. Spreading your money and diversifying, gives you access to more opportunities and can reduce risk. Remember the value of investments can rise and fall so you may not get back what you have invested.
FIND OUT MORE ABOUT DIVERSIFICATION
If you're looking for inspiration from our investment research team on where to invest your ISA this tax year, explore our latest ISA investment ideas.
Or you can use our Wealth Shortlist. It's designed to help investors build and maintain a well-balanced and diversified portfolio.
Our expert analysts have put funds under the microscope to make sure the list only contains the funds that our in-depth analysis shows have the greatest long-term performance potential.
If you don't feel comfortable building and maintaining a portfolio, take a look at our ready-made portfolios. These all-in-one portfolio funds let you choose how to balance risk and potential returns from four options. HL’s investment experts will make the day-to-day investment decisions from there.
All you'll need to do is review your investments every now and then to make sure they still meet your needs and objectives.
HL’s fund ranges are managed by our sister company Hargreaves Lansdown Fund Managers Ltd.
Open your ISA today in minutes
It's quick and easy to get started and takes just minutes online.
Before you apply, make sure you're happy with our terms and conditions including Tariff of Charges) and key features. Then all you need is your debit card and national insurance number to hand.
You can’t pay into more than one of the same type of ISA in the same tax year. You can however split your ISA allowance between the different types, for example you could invest £10,000 in a Stocks and Shares ISA and the remaining £10,000 in a cash ISA.
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