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Which ISA is Right for You?

23.02.2018 by Jim Ker

With the new tax year upon us including a new £20,000 tax-free ISA saving allowance for the 2018/19 tax year, many people are considering where best to put their savings.  When looking at ISA accounts, it’s important to understand the differences between products on the market so you can decide which fits your needs. 

What is an ISA?

An Individual Savings Account (ISA) is a way to save money each year without paying any tax on the growth it generates. The Government sets maximum allowances that can be saved each year. This is set at £20,000 for the 2017/18 tax year.

In any tax year, you can elect to save your annual ISA allowance in:

  • a Cash ISA
  • a Stocks and Shares ISA
  • an Innovative Finance ISA
  • a lifetime ISA (up to a maximum of £4,000).

You can use a combination of these ISA types, up to your annual allowance.

UK residents over 16 can open a Cash ISA, but you must be over 18 to open a Stocks and Shares ISA or Innovative Finance ISA. Only Lifetime ISAs have a maximum age limit of between 18 and 40 years. Tax treatment of ISAs is set by the Government and may change in the future. Although there are 4 ISA types currently on the market, the majority still fall into one of two categories; Cash ISAs or Stocks and Shares ISAs.

What is a Cash ISA?

Cash ISAs are much like a savings account and are available from most high street banks and building societies. They are considered a safe, low risk savings choice and suitable if you need quick, short-term access to your cash. However, Cash ISA interest rates have been low for months now and with inflation seeing a 5 year high of 3.1% in November 2017, it could mean that the spending power of your savings is actually falling and that, in real terms, your savings are being eroded.

What is a Stocks and Shares ISA?

A Stocks and Shares ISA has a greater potential for growth over the longer term. So it is more likely to produce inflation beating returns than the cash alternative.

However, the possibility of better returns is not without risk and different options can offer different levels of risk. When investing in a Stocks and Shares ISA, investments can both rise and fall depending on the performance of the underlying fund, so you could potentially get back less than you original amount invested. As a result, you must make sure that you are comfortable with this risk before choosing a Stocks and Shares ISA.

There are different types of Stocks and Shares ISAs available on the market including Tracker ISAs and With Profit ISAs. These work slightly different to each other.

When depositing money into a Tracker ISA you need to buy units, the value of which can fluctuate up and down depending on the performance of the underlying fund.

A With Profits fund operates slightly differently in that all members’ money is invested across a spread of different assets (cash, guilts & bonds, stocks and shares and property) – a proportion of the fund is invested in low risk assets to protect members’ initial investments, whilst an element is put into high risk assets to create growth. Any growth, or surplus, within the fund is shared fairly amongst the members.

At Kingston Unity, we believe in fairness and looking after our members’ money – this is why our Investment ISA invests in our With Profits fund which sits comfortably between low risk Cash ISAs and higher risk Stocks and Shares ISAs.


Please Note: You must confirm you have read the key facts, before downloading this document.

Key Facts about our services and costs

1. The Financial Conduct Authority (FCA)

The FCA is the independent watchdog that regulates financial services. This document is designed by the FCA to be given to consumers buying certain financial products. You need to read this important document. It explains the service you are being offered and how you will pay for it.

2. Whose products do we offer?

We offer products from the whole market

We only offer products from a limited number of companies

We only offer our own products

3. Which service will we provide you with?

We will advise and make a recommendation for you after we have assessed your needs.

You will not receive advice or a recommendation from us. We may ask some questions to narrow down the selection of products that we will provide details on. You will then need to make your own choice about how to proceed.

We will provide basic advice on a limited range of stakeholder products and in order to do this we will ask some questions about your income, savings and other circumstances but we will not:

  • conduct a full assessment of your needs;
  • offer advice on whether a non-stakeholder product may be more suitable.

We can only offer products from Kingston Unity Friendly Society. These products will enable you to:

  • protect yourself and your loved ones in the event of death
  • save and invest with the added benefit of protecting yourself and your loved ones in the event of death
  • provide benefit cover in the event of sickness

4. What will you have to pay us for our services?

Normally, if you buy a financial product direct from us, there will be no payments such as commission or fees payable. If there are any commission or fees payable, we will tell you how we get paid and the amount before we carry out any business for you.

5. Who regulates us?

Kingston Unity Friendly Society, 9 Navigation Court, Calder Park, Wakefield, WF2 7BJ is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and .the Prudential Regulation Authority. Kingston Unity Friendly Society’s FCA Registered Number is 110056.

Kingston Unity Friendly Society permitted business is advising and arranging life assurance and pensions business.

You can check this on the FCA’s Register by visiting the FCA’s website or by contacting the FCA on 0845 606 1234.

6. What to do if you have a complaint

If you wish to register a complaint, please contact us:
…in writing Write to Kingston Unity Friendly Society, Complaints Department, 9 Navigation Court, Calder Park, Wakefield, WF2 7BJ. …by phoneTelephone (01924) 240164

If you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service.

7. Are we covered by the Financial Services Compensation Scheme (FSCS)?

We are covered by the FSCS. You may be entitled to compensation from the scheme if we cannot meet our obligations. This depends on the type of business and the circumstances of the claim.

Most types of insurance business are covered for 90% of the claim with no upper limit.