There’s just over a month to go until the end of the tax year: Here’s Holly Mackay’s essential Isa guide to help you bag a savings bargain
- Every adult can pay in up to £20k each year, but you can start with £100 or less
- More than one in ten Isa holders has less than £1,000 invested
- Holly Mackay has been testing the best online investment Isas for many years
With just over a month to go until the end of the tax year – April 5 – now is the time to think about a tax-friendly stocks and shares Isa. Every adult can pay in up to £20,000 each year although many options now let you start with £100 or less.
As founder of website Boring Money, I have been testing the best online investment Isas for many years.
To assist me, I have more than 30 separate accounts with Isa providers so I get to taste the real experience, warts and all. Here’s who I think is best, depending on how much you have to invest and what you’re looking for.
Tax-free allowance: Every adult can pay in up to £20,000 each year
1. Best for beginners
It is a myth that investing is for sharp-suited Wall Street executives only. More than one in ten Isa holders has less than £1,000 invested – and better options for the less confident are emerging all the time.
Wealthify – wealthify.com – is a sound option which offers an easy way in for those who don’t want to make the investment decisions themselves. You can choose from one of five profiles and get a ready-made investment which is blended for you.
Moneybox – moneyboxapp.com – uses the concept of ’round-ups’. You save into an Isa by rounding-up change from purchases, chipping in 50p here and there. It is less dramatic than sending thousands of pounds to an investment provider in one hit and is a great way to dip a toe into the Isa water.
The app is simple to use and is surprisingly engaging for an investment service.
Nutmeg – nutmeg.com – is another option which will walk you through a simple questionnaire and then pull together a ready-made mix of investments, according to your preferences.
Value: Holly Mackay has spent years testing Isas
2. Best for Isas up to £50,000
AJ Bell Youinvest is a decently priced good all-rounder which will let you put both shares and a choice of leading investment funds in your Isa. There’s a nice app and the supporting investment research is good.
For those less confident, help is at hand in the form of its ready-made investment options that do the heavy lifting for you.
Fidelity is a big-brand global name and offers investors a decently priced Isa, a good website, helpful people on the phones and a wide range of investments to suit all sorts of experience levels. The service has notably improved over the past year and is well worth a look.
Vanguard is a huge US investment manager which offers low-cost investing to millions of customers worldwide.
You can set up an Isa and choose from a range of five simple investment options from its ‘life strategy’ range. It is low cost and also rather ‘no frills’.
It only offers its own products so if you prefer more choice and want to blend your own mix of funds and shares, it is not for you.
3. Best for Isas over £100,000
- There are six million online Isa stocks and shares accounts. Overall, some 11 million adults subscribe to some form of Isa every year.
- Four in ten Isa holders have less than £10,000 in shares.
- 15 per cent have more than £100,000 in their Isa.
- Investor confidence is low – half of all investors score their confidence at five or less out of ten.
If you know your way around investment markets and want a solid Isa option that is as cheap as they come, have a look at Halifax Share Dealing. You can trade and access most mainstream investments but beware – this is bare bones stuff and don’t expect anything fancy.
AJ Bell Youinvest is arguably the best halfway house between having reasonable fees for larger accounts but decent service and a good supporting website and app.
Finally, Interactive Investor has a fixed fee for Isas, which means they get relatively cheaper the more you invest. The website and service can be occasionally patchy but this is improving. If you are time poor and impatient, the lower costs may not compensate for the sometimes clunky online journey.
4. Best for sustainability
One in four investors say it is important that they invest sustainably and back socially responsible firms.
There is increasing evidence that investing in longer-term sustainable businesses should not be assumed to involve a trade-off when it comes to the generation of investment returns. If you are looking for help to find sustainable investments, Interactive Investor has lots of information which is probably the best thought-through research out there for retail investors.
We all have different priorities – avoiding fossil fuels, strong corporate governance, treating workers fairly, avoiding tobacco – and the tools here will help pinpoint what you are looking for.
Nutmeg also has a socially responsible option for all its portfolios and provides quite detailed information on what your investments will do for you – and what they will do for the planet.
Holly Mackay is the founder of consumer website Boring Money.
THIS IS MONEY’S FIVE OF THE BEST CASH ISA DEALS