Features of an Individual Savings Account (ISA)
Tax free savings account
Stocks and shares ISA
Features of a Deposit and Savings Account
Put money in the bank and earn interest (Higher interest than a current account)
Easy to take money out
Low risk
Features of Premium Bonds
Invest up to £50,000
No interest
Enter prize draws for cash prizes.
Safe and government-backed
Features of Bonds and Gilts
Very safe
Bonds for companies
Gilts for government
Features of Shares
Own part of the company
Can get dividends (profit share)
Higher risk, higher potential return
Features of Pensions
Pay into pension (out of post-tax income)
Employer may also contribute.
Can’t access until retirement age.
Positives/Negatives of ISAs
Positives:
Tax free
Stocks and shares ISAs can earn big returns
Negatives:
Share prices could fall, so could lose money
Can only put in £20k
Positives/Negatives of Deposit and Savings Accounts
Positives:
Easy access
Very safe
Government guarantee up to £85,000
Negatives:
Tax payable on interest
Positives/Negatives of Premium Bonds
Positives:
Could win up to £1m per month. (plus smaller prizes)
All winnings are tax free
Easy access to money
Negatives:
Only take out what you put in
No interest paid
Positives/Negatives of Bonds and Gilts
Positives:
Safe, secure, regular income
Negatives:
Lowish rate of return
Not 100% guaranteed that you get a return
Positives/Negatives of Shares
Positives:
Income through dividends and hopefully increase in value.
Negatives:
Can be very volatile and value can go down
Dividends are not guaranteed
Pay tax on dividends and capital gains
Positives/Negatives of Pensions
Positives:
Pension contributions also often paid by employer too
When you retire you can either get a lump sum or a monthly ‘wage’
Negatives:
Different companies use different providers
High levels of admin if move companies
Value of fund can fall
