A Mum’s Guide to ISAs – Back to Basics

October 23, 2019 No Comments
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Let’s talk about ISAs. Now don’t get scared. While the world of Individual Savings Accounts (to give them their full name) can be intimidating and a little confusing, ISAs are a unique way to save money that I think often goes unnoticed.

Disclosure – this is a collaborative post

They used to be everywhere at the turn of the century when introduced and were seen as the thing to have when someone was saving to buy their first home, but the humble ISA still has some benefits that may help mums out there who are looking to save with minimal fuss.

In this short post, I’m going to show you how to get started with the world of ISAs. And to make it easy to follow, I’m going to be taking the example of one provider – Scottish Friendly – as I think mentioning a handful of companies would complicate things. We’re going to look at where to start, how to handle and ISA and why they might be worth your time.

So where do I get started with ISAs?

The first thing to know is that there are two main types of ISAs out there you’ll want to know about.

Cash ISAs are merely saving accounts you put money in. Over time they accrue a very small level of interest, just like a bank account. The big difference is that interest in an ISA doesn’t get taxed. There’s a subfield of accounts including the likes of Junior ISAs too that can see you saving for little ones.

Mums guide to ISAs - Stocks and shares

Stocks & Shares ISAs are where you take those savings and have someone put that money in any number of investments. In most cases, it will be on shares of companies on a stock market. While Cash ISAs have a steady but low-interest rate, Stocks & Shares ISAs have a higher rate on average, but follow the markets and can fluctuate.

How do I pick the right one?

You have to take a few hours of your browsing time and dedicate it to reading up on what different companies offer. For example, ISA.co.uk’s Scottish Friendly page takes the entire website and breaks it down into manageable chunks for information that anyone with no prior knowledge can understand.

Money Saving Expert also has excellent resources on what to look out for and what account might work best in your scenario.

Simple points to consider when picking an ISA should include:

  • Consider how much you want to invest
  • Figure out which ISA type works best for you
  • Weighing up whether you want to invest with cash or look at stocks

How to keep tabs on your ISA

If you can order a taxi, get a takeaway and get the groceries with an app, you should be able to take care of an ISA the same way.

You don’t want to be investing in something that you have to actively spend time on when there are a million other things to be doing. Get yourself an ISA tracking app that can get you looking at your savings in just a few taps. I think it’s great if you’re putting money in a stocks based ISA as you don’t want to feel left in the dark with how your money is being invested.

And if you’re someone who loves their apps, and a little saving to boot, check out this review of TopCashback on the blog.

Why an ISA might be worth your time

This is an interesting fact with regards to Scottish Friendly (from FT Adviser) that might pique your interest: last year they had almost 600,000 people investing in an ISA. That’s more than the population of Blackpool Aberdeen and York combined.

More people are looking at an almost hassle-free form of saving, and ISAs seem to come back around as a pleasant way of doing so. I would recommend looking especially at Junior ISAs, as they’re an excellent long-term investment for kids and something that usually other family members can pay into over the years to create a nice little pot.

Fancy some more tips and finance and how to look after the pennies at home?

Keep up to date with the latest money based posts on the blog right here, where you can read on everything from Christmas saving tips to mortgage advice

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freddiesmummyuk

I am Clare, a homeschooling mum in the UK to my gorgeous 9 year old son, Freddie. We also live with my bearded husband Stuart.

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