Cash ISA

A Cash ISA works like a standard savings account, except the interest earned is not taxed. It's ideal for those who want a low-risk savings option and prefer to have access to their money with minimal risk of losing it.

Stocks and Shares ISA

This ISA allows you to invest in a range of stocks, shares, bonds, and funds without paying tax on any gains or dividends you receive. It's best for individuals who are looking for potentially higher returns than a Cash ISA and are willing to accept the risk that comes with investing in the stock market.

Innovative Finance ISA

This ISA is for investments in peer-to-peer lending platforms. You can lend your money to individuals or businesses through the ISA without paying tax on the interest you earn. It's suitable for investors looking for higher returns than traditional savings accounts and are comfortable with the higher risk profile of lending money.

Lifetime ISA (LISA)

This is aimed at helping young people save for their first home or retirement. You can contribute up to £4,000 each year until you are 50, and the government adds a 25% bonus to your savings, up to a maximum of £1,000 per year. It's ideal for those aged 18 to 39 who are planning to buy their first home or save for retirement.

Help to Buy ISA

This ISA is closed to new accounts since November 2019, those who already have them can use them to save for their first home. Like the LISA, the government provides a 25% bonus on contributions, up to certain limits.

It was originally introduced for individuals who opened their accounts before the deadline and are saving to buy their first home.

Junior ISA (JISA)

This ISA is for children under 18 who do not have a Child Trust Fund. There are two types: a cash Junior ISA and a stocks and shares Junior ISA.

It's for Parents, guardians, or family friends looking to save for a child's future in a tax-efficient way.

Premium Bonds are a type of savings product issued by the National Savings and Investments (NS&I) agency in the UK. 

How they work

Instead of earning interest, each £1 bond you buy is entered into a monthly prize draw. The prizes range from £25 to £1 million, and they are all tax-free.

You can buy Premium Bonds in units of £1, with a minimum purchase of £25 and a maximum holding of £50,000.

The chance of each individual bond number winning a prize is the same, and winnings are decided through a random lottery using a machine called 'ERNIE' (Electronic Random Number Indicator Equipment). You can win multiple prizes in a single month if you hold numerous bonds.

Anyone aged 16 or over can buy Premium Bonds. Parents, guardians, and grandparents can also buy them for children under 16. They are popular as gifts, especially for children, to encourage saving.

Considerations

Premium Bonds are a secure investment because they are backed by the Treasury. You can cash in your bonds at any time without penalty and get your money back. However, it usually takes up to eight working days to receive your funds.

The rate of return on Premium Bonds is calculated as an annual prize rate, currently around 4.4% (as of March 2024), but this is not guaranteed like interest. Instead, it reflects the average payout if you were to win prizes.

The actual returns depend on luck since not everyone will win prizes regularly. Some people might earn more than they would in a savings account, while others might not win anything at all. The current odds of any £1 Bond number winning a prize are at 21,000 to 1.

How to Buy and Manage

You can buy Premium Bonds directly from NS&I online, by phone, or by post.

Management: Bonds can be managed online through the NS&I website or app, where you can also check if you’ve won any prizes.

Premium Bonds offer a unique way of saving where the thrill of potentially winning substantial tax-free prizes can be more appealing than traditional interest-bearing savings accounts, albeit with no guarantee of returns. They remain a popular choice for many in the UK as a safe and fun way to save.

There are several types of pension schemes designed to help you save for retirement. Each type has different features, benefits, and rules. Please find below a summary for each pension.

State Pension

This is a regular payment from the government that you can claim when you reach the state retirement age. It's based on your National Insurance contribution record.

You must have paid or been credited with National Insurance contributions to qualify. Please visit our State Pension page for more information.

Workplace Pensions

Defined Benefit (DB) Pensions: Often called "final salary" or "career average" pensions, they promise to pay out a certain amount each year when you retire based on your salary and how long you’ve worked for your employer.

Defined Contribution (DC) Pensions: Also known as "money purchase" schemes, the contributions you and your employer make are invested, and the amount you have at retirement depends on how these investments have performed.

Auto-enrolment: Most employees are automatically enrolled into workplace pensions by their employers, who must also make contributions on their behalf. You should ask your employer for information in their work pension scheme.

Personal Pensions

These are individual contracts between you and the pension provider, usually an insurance company or an investment firm.

Standard Personal Pensions: You choose how much to contribute, and the provider invests it on your behalf.

Self-Invested Personal Pensions (SIPPs): Offer more control over the investments. Suitable for people who want to make their own investment decisions.

Tax Benefits

Contributions are topped up by tax relief, meaning some of your money that would have gone to the government as tax goes into your pension instead.

Stakeholder Pensions

These are a type of personal pension designed to be more flexible and with capped charges. They have low and flexible minimum contributions, making them accessible to those with irregular income.

Group Personal Pensions (GPP)

This type of workplace pension is set up by an employer but managed on a group basis by a pension provider. Each employee has their own individual plan within the group arrangement.

Each type of pension scheme has its advantages, depending on your employment status, income, and retirement goals. It’s important to consider these factors and consult a financial advisor or the free Pension Wise service to determine which type of pension will best serve your needs as you plan for retirement.

Savings bonds are a popular choice if you want a low-risk investment with predictable returns. They can be especially useful for long-term savings goals like retirement or educational funds. However, they're less suitable for those seeking high returns or who might need immediate access to their funds.

How they work

A savings bond is a form of fixed-term investment. The longer you leave your savings untouched, the higher your interest rate will be. During this set period, you cannot access the cash in your bond, but you will earn a fixed amount of interest. If you need to access it many providers will charge penalties for early withdrawals.

Features of Savings Bonds

• Fixed Interest Rates: The interest rate is fixed at the time of purchase and doesn't change for the duration of the bond term.

• Term Length: Common terms for savings bonds are 1, 3, or 5 years. Longer terms usually offer higher interest rates.

• Minimum Investment: There is often a minimum investment amount, which can range from £100 to £1,000 depending on the provider.

• Penalties for Early Withdrawal: If you withdraw your money before the end of the term, you may have to pay a penalty or lose some of the interest.

Types of Savings Bonds

• Retail Bonds: Issued directly to the public by companies or the government.
  
  

• Fixed-Rate Bonds: Offer a guaranteed rate of return over the bond's life.
  
  

• Children's Bonds: Specifically for investing on behalf of children, offering tax-free interest.

How to buy

You can usually buy these products from banks and financial institutions but you should always try to get independent financial advice from a regulated financial advisor before committing to a product. 

Check the Financial Conduct Authority's page on important things to ask.