They are designed for savings made over the medium to long term, which really means for at least six years and beyond - think in terms of saving for the costs of university or for your own retirement. The key to having a suitable balance is to make sure that you have sufficient ‘rainy day’ savings in easily accessible accounts, such as a savings account or Cash ISA, which can supplement what you then save for the longer term in a Stocks and Shares ISA.
It’s important before starting out to assess, realistically, what your attitude is towards the risk of your money falling in value and to think about the amount you want to invest and for how long. Also, choose how best to access Stocks and Shares ISAs - online, by telephone or in person - as well as the options for regular monthly investments or lump sums.
Whatever your route in or the choices you make, I would encourage people to think about opting for a Stocks and Shares ISA. It’s a tax-efficient way to help you build up your wealth over the longer term enabling you to reach your savings goals, whatever your ambitions may be.
*Stocks and Shares ISAs subscriptions made up £17.9 billion in 2014/15, 23% of the £79 billion total ISA subscriptions. More information on ISA statistics.
**This is an illustration of the average returns on a Cash ISA and a Stocks and Shares ISA Cash ISA: assuming maximum subscription per year, average ISA savings rate for year and showing the revised total balance plus interest. Stocks and Shares ISA: assuming maximum subscription per year, average return on a model portfolio index-linked, and showing the total returns after annual investment.