Six common misconceptions about ISAs

Could an ISA could be the right move for your finances? Don’t go in blind. It’s time to debunk six commonly held misconceptions about ISAs.

Misconception #1: You have to pay in a substantial amount of money

Absolutely not. We believe ISAs should be accessible to everyone. With our Junior ISA and Investment ISAs you can start investing from only £10 a month. You also have the option to increase your payments incrementally year on year, if you start to feel more comfortable.


Misconception #2: ISAs aren’t adaptable

Not the case at Scottish Friendly. Our ISAs put you in control. You can stop, re-start and change payment amounts any time you like (although doing so may have an impact on how quickly you’ll reach your saving or investment goals).

When it comes to accessing your money, it really depends on the type of account and the provider you choose – at Scottish Friendly we only offer Investment ISAs, which aims to put your money to work using the long-term growth potential of the stock market although the value of your investments can fall as well as rise, so you could get back less than you paid in.


Misconception #3: ISAs are risky

It depends. Investment ISAs are generally linked to the stock market, meaning that the money in the account could have a greater potential than a secure cash account to increase over the long term – but it can also fall, so your original investment is not guaranteed.

Our My Choice (ISA) come with an option of nine risk-graded funds, so you can control exactly how much risk you’re willing to take on. An ISA should be considered a medium to long-term investment for a period of at least five years. Plus you should always thoroughly research your providers before committing to an account. Scottish Friendly has been established since 1862, and we like to think that longevity counts for something. Please bear in mind that past performance is not a guide to future performance.


Misconception #4: You can only have one ISA

You can hold more than one ISA, but you can only open and subscribe to one Cash, one Stocks and Shares, one Lifetime ISA and one Innovative Finance ISA each tax year. This could be a Cash ISA with one provider and a Stocks and Shares or Innovative finance ISA with a different provider, or all with the same provider (depending on the types of ISA each provider offers). However, you can’t exceed your annual allowance for the tax year, which currently stands at £20,000. Tax treatment depends on your individual circumstances and tax law may change in the future.


Misconception #5: ISAs are one-size-fits-all

Not only can you adjust the amount you pay into your ISA as you go, if you open an account with us, you can also personalise the ISA itself! If you want to keep track of several different saving goals, a Scottish Friendly ISA allows you to create new pots within your account to manage your money in a way that’s easy to keep track of. These could be holiday funds, wedding funds or university tuition funds, to name a few examples.


Misconception #6: ISAs are complicated

It depends. Investment ISAs are generally linked to the stock market, meaning that the money in the account could have a greater potential than a secure cash account to increase over the long term – but it can also fall, so your original investment is not guaranteed.

Our My Choice (ISA) comes with an option of nine risk-graded funds, so you can control exactly how much risk you’re willing to take on. An ISA should be considered a medium to long-term investment for a period of at least five years. Plus you should always thoroughly research your providers before committing to an account. Scottish Friendly has been established since 1862, and we like to think that longevity counts for something. Please bear in mind that past performance is not a guide to future performance.


ISA allowance

ISA allowance

The current Government rules mean that you can put a total of £20,000 into a ISA during the 2017/2018 tax year.

More about your ISA allowance

Our range of ISAs

Our range of ISAs

Scottish Friendly offers a range of Investment ISAs that could help you invest for the future.

More about our ISAs

No advice has been provided by Scottish Friendly in relation to any of their products. If you are in any doubt as to whether a product is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting www.unbiased.co.uk. Advisers may charge for providing such advice and should confirm any cost beforehand.