Hello and welcome to another of my finance related web sites, and this one has been designed to help you understand all about ISA's, and to find the best isa on the market for you. If this is the first time you have visited one of my sites may I wish you a very warm welcome and I hope you find the information and advice here both useful and informative. As a self taught full time trader and investor, who has been involved in trading and investing for over fifteen years, I know how hard it can be to find good quality impartial and reliable advice, particularly as a woman. Hopefully this site will help you find the best isa to meet your own personal circumstances and investment goals.
I had to learn the hard way, by making mistakes, and often listening to the wrong advice. You quickly learn that there is only one person's judgement you should trust, and that is your own.
All the information you need is generally freely available, so there should be no excuse not to understand the nature of the investment, or the potential risks and rewards associated with the product. As you will see in the above navigation bar, I have two blogs on trading, investing and currency trading, and if you would like to ask me any questions, please just email me via the link above. I do receive several hundred emails a week, so please be patient! I will always try to answer your question as quickly as possible. Over the next few pages I will explain for you in detail what an ISA is, how it works, how to identify the good and bad products on the market, and also information on some of the latest offers, which I feel are the best isas currently available. These are updated daily, so will always be up to date with the latest isa product. In addition I will also explain the latest government legislation for isa's, and how I believe this may change in the future. Once you have read the following, you should be an expert, and I hope be able to make an informed decision about the right cash isa savings account for you. So let's get started and take a look at what an ISA is in simple terms.
The history of the ISA, or Individual Savings Account, can be traced back to the Conservative government of the 1980's and the then chancellor Nigel Lawson. With the move towards privatisation of state owned assets, the advancement of home ownership, and the encouragement of individuals to invest in the stock market, the PEP or personal equity plan was initially introduced. This was the great vision at the time of a share owning democracy, which coincided with the market deregulation some years later. PEPs were first unveiled in the 1986 budget, and initially were focused on individual shares, as the name suggests. Over the years various changes were made to the original product to make them more attractive to investors, such as increasing the amounts that could be invested, and aligning them to the tax year, rather than the calendar year.
By the early 1990's a new Chancellor was in place under the Major government, and the TESSA was introduced ( Tax Exempt Special Savings Account). It's purpose was to try to provide a balance to the equity-orientated nature of PEPs by providing a more flexible investment vehicle which allowed cash to be deposited into designated share accounts operated by banks and building societies. The common theme between the PEP and the TESSA was to provide a tax efficient and straightforward long term savings vehicle for private investors, based on companies listed on the UK stock exchange.
Politics being politics, when the labour party swept into power in the 1997 general election, the TESSA and PEP were doomed, despite the fact that both products had proved to be extremely popular with investors as a tax efficient way of saving. Within months of becoming the new chancellor, Gordon Brown introduced a replacement for both products along similar lines, and so the ISA was introduced as a broader, more efficient vehicle for tax free saving, which it was hoped would appeal to a broader cross section of savers. Simultaneously Gordon Brown announced that no new PEPs or TESSAs could be opened after the 5th April 1999. TESSAs had a fixed life of five years, and therefore had to be cashed in, or alternatively could be rolled over into a TESSA only ISA. The final TESSA matured on the 5th April 2004, and investors were given a maximum of 6 months in which to transfer their money into a new product.
PEPs on the other hand had no fixed term, and could therefore continue to operate under the original rules but with no new funds being added, which meant that the same tax advantages still applied for the duration of the PEP life.
So, if you are looking for the best isas, or best isa rates, where should you start? - my own view is to first understand the isa itself, look at the risks and possible rewards, and then to consider your own personal circumstances in order reach a decision on the best isa, from the most reputable companies. Never forget though, that the government of the day, can ( and often does) change the legislation - just look at the above. Whilst this may not always be a bad thing, it is as well to bear this in mind when making any long term decisions. I will cover this in more detail shortly, but first let's look at the fundamentals of an isa, and how we can choose the best isa for ourselves.