Various adverts in the press have, historically, stressed that you should utilise your ISA allowance for the year. Many teachers have bought ISAs in the past without realising what they are invested in and are therefore surprised when they see the value fall as well as rise. There are so many ISAs available on the market that it is almost impossible for anyone to work their way through the minefield. In fact, there are literally thousands of different funds available and it is vital for a financial adviser to assess your attitude to risk and your own objectives before recommending a particular fund.
“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.” - Ward, Arthur
Many teachers attending our seminars have already purchased ISAs in the past and are finding that the performance is not to their satisfaction. They feel that they are perhaps trapped in something that they bought but did not understand. The truth is however that these can be moved or altered to suit your ongoing situation. This means, therefore, that if you originally had a high risk ISA whereas you now wish to be more cautious, once again this can be arranged. PEPs, although no longer available, can also be altered in the same way.
The rules that govern ISAs are quite complicated. Here we have the choice of leaving some money in the building society, some invested in stocks / shares / corporate bonds or some in insurance contracts.
ISAs are primarily invested in collective investments, which means that your money is pooled with other people’s money and invested in the area of your choice. For many people this means stocks and shares but for many others this could mean cash / corporate bonds / insurance contracts. Do you know what your funds are invested in? Most people don’t! It is essential to have your own investment review by an IFA to ensure that your contracts meet your objectives.
“If you think education is expensive, try ignorance.” - Derek Box (1930 - ), HarvardUniversity President