An ISA, or individual savings account, is a tax-efficient 'wrapper' for savings and investments. To make use of an ISA, you must be a UK resident or Crown employee.
There are currently six different types of ISA: Cash ISA, Investment ISA, Junior ISA, Innovative Finance ISA, Help to Buy ISA and Lifetime ISA.
Chelsea currently offers the Investment ISA and Junior ISA.
Anyone over the age of 18 meeting the above criteria can hold an Investment ISA, while cash or investments can be wrapped into a Junior ISA on behalf of children under the age of 18.
Each year, you are given an ISA allowance – a maximum amount of money the government allows you to put into the tax wrapper. If you don't use it one year, you lose it. The tax year runs from 6 April to 5 April the following year.
The Investment ISA has an annual allowance of £20,000 in the 2020/2021 tax year. The Junior ISA has an allowance of £9,000 in the 2020/2021 tax year.
In both cases, you can invest from as little as £50 per month with Chelsea. Or you can invest a lump sum – the minimum amount for which is also £50.
Quite simply, if you have any money in cash accounts or investments, there is no reason not to 'wrap' them in an ISA.
1. Your money, not the tax-man's
By putting your savings or investments into an ISA, you won't have to pay any income tax on any dividends or interest you receive, nor will you be liable for any capital gains tax if your pot of money grows.
2. Less admin
You don't have to declare your ISAs on a tax return.
3. Easy access
There is no notice period for most investments that are inside an ISA wrapper, meaning you can access them whenever you wish, although it may take up to eight days for the money to clear into your bank account.
There can be a notice period for some cash savings held within an ISA wrapper, but not all. This is generally the case if a provider has a special interest rate for a certain period and in return insists that savers give notice before withdrawing money.
4. Death benefits
Spouses can benefit from an additional one-off ISA allowance equal to the total amount the deceased held within their ISA at the date of death.
Chelsea charges 0.4% per annum and our FundStore platform, powered by Aegon, charges a further 0.15% per annum.
These charges have currently been waived on the Junior ISA, which enjoys a 0% service and platform charge.
There will then be a separate charge for the fund(s) in which you invest. This is typically 0.75% per annum but varies from fund to fund.
Unlike some other providers, the charges from Chelsea are all-inclusive and there are no extra surprise fees for things like telephone or postal dealing, printing valuation statements, switching or exiting your investments.
So if you change your mind about your investment and want to move it into another fund(s) you can.
We know that having such a large choice of funds can be overwhelming, so while Chelsea isn't a financial adviser, we offer different ways to help you narrow down your investment choice:
1. Independent fund research
Our fund research team meet many fund managers every year to carry out independent research and narrow down the choices for you via our Core Selection and Selection lists.
2. VT Chelsea Managed Funds
A complete investment solution, choose from four different funds, based upon your requirements and attitude to risk.
Investing in a Chelsea ISA couldn't be easier. You can invest online, by telephone on 020 7384 7300 or by sending us an application form and payment to Chelsea Financial Services St James’ Hall, Moore Park Road, London, SW6 2JS. For postal applications, please make your cheque payable to Aegon unless otherwise specified.
Please note that our Junior ISA requires a form to be completed and cannot be opened online.
Before investing, please familiarise yourself with the Terms & Conditions and Key Investor Information Documents within the documents and guides section of our website.