Sarah saved in a fixed rate Cash ISA a couple of years ago and she’s now received a letter telling her it’s about to mature. She doesn’t need access to this money for a number of years so is thinking about whether there are any alternatives to another Cash ISA.
Sarah is not saving for anything in particular and now wants to be able to save monthly as well. She’s looking to continue to build a pot of money for her future.
Sarah hasn’t considered investing before, however she has been reading the money pages in the press and she now knows that if she invested her money she has the potential for greater returns than a traditional Cash ISA, however the actual returns would be affected by how her investment performs. She recognises that the value of her investment could go down as well as up, however she is prepared to take some risk.
Sarah is aware of the tax efficiency of an ISA and that this favourable tax treatment could change in the future. She also knows that each tax year there are limits to how much she can pay in.
Sarah is now considering transferring her maturing Cash ISA into a Stocks and Shares ISA and then plans to make regular payments into it each month.
If she needs to she knows she can change or stop her monthly payments at any point.
Sarah is an illustrative character designed to highlight why and how people approach investing. Her financial situation, objective, knowledge and approach are fictional and you should always consider your own before investing.
The tax treatment of your savings and investments, including the favourable tax treatment of ISAs, may be subject to change in the future and depends on your individual circumstances. She also knows that each tax year there are limits to how much she can pay in. You can only pay into one cash ISA, one stocks and shares ISA, one innovative finance ISA and one lifetime ISA each tax year, up to the annual ISA limit.