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Among the Stocks and Shares ISAs worth looking at right now is the one from Hargreaves Lansdown. So, what is it all about and is it worth investing in?
In this Hargreaves Lansdown Stocks and Shares ISA* review we’ll take a look at how the ISA works. You’ll discover who can invest, how much you need to invest and whether it is the right option for you.
At the end of the review we’ll also look at some possible alternatives to this particular ISA.
Understanding ISAs
The idea of investing in stocks and shares remains as appealing as ever.
ISA plans are popular for their tax-efficient approach. This means that many people see a Stocks and Shares ISA as offering them the best of both worlds. You get to try and earn big in the stock market but you do it in a simple and flexible way that is tax-efficient.
The first thing you will want to understand is what an ISA really is. This is really a fairly simple concept to be honest. Not everyone fully understands it, though.
To start with, the name comes from the term ‘Individual Savings Account’. ISAs have proven to be a hugely popular type of savings account since being introduced. This is largely due to the tax efficiency and the simplicity.
A common mistake that people make is to think that the ISA is the investment itself. This isn’t quite right, as it is more like a wrapper that is used to house the investment. This is why you will come across different types of ISAs.
You may already know that Cash ISAs are available. These are a straightforward type of savings account with tax benefits.
Stocks and Shares ISAs are more about investing and trying to take advantage of share price gains – capital growth. You’ll also get to enjoy tax tree dividend income when you invest through a Stocks and Shares ISA.
Easy to Manage
One of the first things that stands out about the Hargreaves Lansdown Stocks and Shares ISA is that it is easy to manage. This is great news for all those people who would love to try and earn on the stock market but who don’t know how to do so. The fear of getting caught up in paperwork and not knowing what to do is definitely one of the reasons that many people decide not to buy shares.
You can open your ISA online* and get started in a matter of minutes.
If it works for you then you can choose from a selection of 6 different pre-built portfolios. These are each designed with different risk levels and investment goals in mind.
Otherwise, you could create your own ISA based upon your own wants and needs. If you decide to create your own ISA, then you will find all of the help and investment tools you might need on the Hargreaves Lansdown website. This includes a handy free ISA guide*.
If you opt for a ready-made ISA, the day to day running of the ISA’s portfolio of funds is handled by the fund manager. You can keep track of it easily enough but you won’t be expected to make big decisions about buying and selling shares. The fund managers will buy and sell in order to keep the investment moving in the right direction and nicely balanced.
Hargreaves Lansdown Stocks and Shares ISA Fees
The fee for holding investments in a HL Stocks and Shares ISA is never more than 0.45{1652eb1ffa4184925f6a63a9c04ea6b421acb7a78117241e7d4325cdca8339fa} annually. Any other fees you pay will depend on which investments you select.
HL Money Back Guarantee
Something you don’t often associate with a Stocks and Shares ISA is a Money Back Guarantee. With Hargreaves Lansdown this is what you get. If you are not 100{1652eb1ffa4184925f6a63a9c04ea6b421acb7a78117241e7d4325cdca8339fa} satisfied and choose to close your account within the first 12 months, then HL will refund your annual fee no questions asked.
Who Is It Right For?
The flexibility of this investment vehicle means that it is right for a lot of people to try. Whether it is your first time investing in the stock market or whether you are already a seasoned investor, there is a lot to like about this product.
For a start, you get to choose from a wide range of options when getting started. For example, if you like you can choose your own shares or investment trusts to put money into. You could also look at bonds or ETFs, as well funds from top performing fund managers.
Hargreaves Lansdown have again created a free guide to picking shares* and free guide to investing in funds* to help you get started.
This means that you get to choose the approach you feel happiest with but you don’t need to be a financial expert.
How Much Can You Invest in an ISA?
In this tax year – from 06 April 2022 to the 05 of April 2023 – individuals are allowed to invest up to £20,000 in ISAs. You can choose to invest some of this into another type of ISA too. As long as you stay within the £20,000 threshold, then your investment/savings will be free from tax.
It’s important to remember here that the deadline for making ISA contributions for the current tax year is midnight on the 5th April. Once missed, the opportunity to utilise your tax-free allowance for this year is gone. Your allowance will not roll over to the next year.
With this in mind, be sure to take advantage of the tax-free savings on offer. Invest or save your cash in the current tax year, so that you can make the most of next year’s ISA allowance too!
Other Points to Bear in Mind
Another important point to mention is that with the Hargreaves Lansdown ISA, you can get hold of your money at any time. This isn’t always possible with investments of this type.
To get started, you can open your ISA* and then fund it with either a minimum lump sum of £100 or a monthly direct debit set up to invest at least £25 each month.
When you get a dividend or any other income paid out, you have the choice of reinvesting it or having it paid to you. It is possible to set up your account so that the option you choose is carried out automatically each time.
Summary
ISAs are a great way of investing wisely and this one adds the extra attraction of stock marketing investing.
The range of investment options and the flexibility on offer are definitely strong points in its favour.
If you are looking for a tax-efficient investment method with the option to pick your own investments, then the Hargreaves Lansdown Stocks & Shares ISA* is well worth taking a look at.
Important – Investments can go down as well as up in value, so you may get back less than you invest. The information on this page isn’t personal advice – please speak with an independent financial advisor if you are unsure in any way. Tax rules for ISAs can change and their benefits depend on your circumstances.