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Where could your ISA take you?

The tax year ends on 5 April, time is running out to secure this year’s ISA allowance. Two of our clients share how they’ve made the most of their ISAs over the years.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

CJ Hill

Published on 30 March 2020

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

ISAs aren’t just a great way to save tax – they’re a great way to save for the future and reach your goals.

With the tax year ending on 5 April, you might be thinking about where your ISA could take you. Two of our clients share their own ISA stories.

This article isn’t personal advice. Tax rules can change and the benefits of investing in ISAs will depend on your circumstances. If you’re unsure of the suitability of an investment for your circumstances, please ask for advice. Investments rise and fall in value, so you could get back less than you invest.

Learn more about the HL Stocks and Shares ISA

HL client, Prof Lian Hutchings from County Durham, explains how investing in an ISA has helped pay for the cost of university for his twin daughters.

My (now) ex-wife and I started saving over 20 years ago to help support the girls at university, initially using an endowment savings policy. But, after four or five years the fund value amounted to little more than the sum of our contributions.

ISAs have helped us significantly reduce the level of debt our children will graduate with.
Prof. Lian Hutchings

At this point, I took it upon myself to educate myself about personal finance, to enable me to move my savings to a Stocks and Shares ISA, presuming that the stock market would give me better returns over the long run. We transferred to Hargreaves Lansdown (HL) and have never looked back.

We chose HL for two main reasons:

1. The ability to access funds from so many different fund providers. I find it extremely helpful to have such a large selection of funds to choose from and a single website to compare all the relevant fund information. This is especially beneficial when I want to switch our investments between funds from different providers, which is REALLY easy to do through HL.

2. Bringing my investments together in one place. When I first started investing, I invested directly with more than one fund provider. This meant dealing with different companies, lots of paperwork, and multiple statements – far from convenient. With HL everything I need to know about my investments is in one place.

Planning for the long term

For more than 15 years, we invested in an HL Stocks and Shares ISA via regular monthly payments. Taking advantage of pound cost averaging, the diversity of funds available via Hargreaves Lansdown and the length of time, we amassed a significant lump sum which has enabled us to support our twin daughters, Amy and Charlotte, during their time at university. We’ve always invested for growth, re-invested any income and, because we invested via an ISA, we must have saved hundreds of pounds in tax over the decades.

The girls were 21 in January and are both doing fantastically well, Amy is at Leeds University studying Maths and Charlotte is at Imperial College, London studying Biological Sciences.

Words of wisdom

If I were to give any advice to anyone else trying to build their ISA pot I would say education, education, education. If you want to make investment decisions yourself, you’ll need to take an interest in politics, economics and understand your attitude to risk. This will help you to decide which sectors/assets to invest in. We’ve always invested in managed funds, in higher-risk sectors, but have managed that risk by diversifying.

HL client, Ian Staples explains how ISAs have helped him take big adventures.

When I was younger, a wise man said to me “don’t go out and spend your new higher earnings on things like a Porsche, invest so you build up wealth and are always the one who sets life’s rhythmic beat”. And I’m glad to say I stuck by it.

It’s great getting richer, without working
Mr Ian Staples

Back in 1994 we left the corporate path, bought a steel ketch and sailed the Atlantic and around South America. Life on the boat was so economic that we actually built wealth while we sailed, through investing in the stock market.

Around six years ago, we started investing with Hargreaves Lansdown through a Stocks and Shares ISA, contributing each tax year and investing to grow our reserves in a tax-efficient way. My experience with HL has been absolutely first class.

Our retirement plan was to enjoy living on the coast, potter around in a small boat and play lots of tennis. There was no thought of taking on another big adventure. But, our ISA investments had built solidly, and a new adventure started to take shape. If we had sailed south to Patagonia and through Tierra del Fuego, why couldn’t we do the same heading north?

We went out and bought a small sailing boat, a Contessa 32, called Strongbow of Bosham. By the spring we will have finished all the preparation work and will be ready for a shakedown cruise to the west coast of Scotland.

My investment approach

We’ve always invested for growth. I want to build robust wealth as I get older and take income as and when I need it. I find fund managers I support and invest in them for the long haul, living by my rule that if people have been successful they tend to continue being so. I don’t look for a quick buck, patience and being cool is what it’s all about.