Talk to me about stocks and share ISA as though I'm an idiot.

[ilovemynails]

My cash ISA is at the limit. I've been thinking of putting some money away into a s&s ISA each month but don't know where to start. I'm a pensioner. I'd have a limit of £50 per month is that enough.

I might be misreading, but if have used your cash ISA limit (£20k) for this year you will have no further allowance until next April.

Depending on the nature of your cash ISA you may be able to transfer some into the stocks and shares account (but can only ever add new £20k in the tax year - with future years being split between the cash and SS limits which you will be exempt from as a pensioner).

@AbzMozi hadn't thought of that. Might be best for me to learn more and start next April.

@ilovemynails The government will make the following changes to ISAs from 6 April 2027:

• the annual subscription limit for a cash ISA will be set at £12,000 for investors under the age of 65
• for investors aged 65 and over the annual subscription limit for a cash ISA will remain at £20,000

When you say your cash isa is "at the limit" do you mean you've put in £20k since April 5th this year? I'm asking because some people wrongly think the £20k is a lifetime total, but it is per tax year.

Only start investing if you're happy to lock your money away for several years and are unlikely to need it for emergencies.

When you do start investing in a s&s isa, its best to choose a fund that spreads your money over shares in many different companies. That will help to smooth out any ups and downs. A tracker fund will be cheaper than a managed fund and probably perform as well as or better than a managed fund.

This blog might help you: https://www.moneysavingexpert.com/savings/investment-beginners

Personally I invest my money in a Vanguard global tracker fund. They seem to be widely recommended and the fees are relatively low.

"When you say your cash isa is "at the limit" do you mean you've put in £20k since April 5th this year? I'm asking because some people wrongly think the £20k is a lifetime total, but it is per tax year."

Totally agree.👍
So many people think that as soon as they have £20k in an ISA, that is it until it matures.
Some also don't understand that a maturing ISA does not affect your annual allowance so you can transfer a maturing ISA (with the interest) into a new ISA while at the same time, opening a brand new one with this year's allowance.

@Nourishinghandcream@novamiai have £20k from last year. No money has been paid into any ISA since the end of march. This is why I need help like an idiot.
Both of us are over 65 now.

Have a look at Rebel Finance School. It's free but loads of good advice regarding all things financial. Really helps in understanding different tax free options and also looking at different stocks and shares. I'm 9% up on my ISA this year already. I've invested in ISAs for years but with a 'wealth management ' service. Since doing Rebel Finance im now doing it myself and saving a lot in fees to boot.

Ok, in that case you can invest another £20k in an ISA this tax year, and spread it across Cash ISAs and S&S ISAs if you like.

It's worth being aware that the reason over 65s are exempt from next year's changes to the allowances is because they have less time ahead of them to reap the benefits of investing, but that's only an issue if you're saving for retirement or something specific. If it's spare money that you don't need within the next 5 years or so then investing is a good option.

You are most certainly not an idiot; this can be pretty tricky.

The tax year runs 6 April to 5 April. Each year each adult gets £20k total allowance. this allowance does not roll over into a new year, just resets each year.
This can be allocated for cash-, stock and shares- ISA or any mixture you like (Lisa also but that one is not relevant to you).
You can pay it all in in one go, or bit by bit (so long as the total isn’t more than £20k new money for that tax year).
You can also change your ISA provider and type of ISA for existing balances. So say you have a Natwest £20k instant access cash ISA which you set up in the last tax year paying 4% and you have £1k ready to invest now.
You might choose to move that into a Moneybox instant access cash ISA paying 4.5%, and you might decide that you want the your new £1k (of your £20k allowance) to go into a stocks and shares ISA.
You will still have £19k remaining for this tax year (up to 5 April 2027) so decide to do a monthly amount top up into either or both.