I’ve spoken previously about why a stocks and shares ISA is the best type of investment account.

Using a stocks and shares ISA shields your investments from tax. Something you’ll be extremely grateful for in the future.

Each tax year you get an individual allowance of up to £20,000. It’s important to try and make the most of this if possible. The current tax year in the UK ends on 5 April 20201. So you’ve still got a little bit of time to make the most of these super accounts.

Why is a stocks and shares ISA useful?

Any gains made on your investment are not taxed. This means you can grow your portfolio over years and never pay any tax, even when you start withdrawing money.

So you get to keep more of your savings and investments.

There are also cash ISAs. Which protect your savings from tax, but with abysmal interest rates - there’s not as much benefit using one right now. They’re still a good long-term option, but for most, there is a better chance of beating 0.1% interest with a stocks and shares ISA instead.

How do I get rich using a stocks and shares ISA?

Ideally you want to try and use up as much of your allowance each year as possible.

The S&S ISA system is amazing but the rules could always be changed in the future. So it’s important to try and make the most of it.

If you’re able to save and invest as much as you can each year, there’s a great opportunity to build wealth using compound interest.

Where is the best stocks and shares ISA?

This will depend completely on your circumstances and what kind of investor you are.

I like to use Vanguard because that is where I keep my long-term index fund investments.

If you’re someone who invests mainly in individual shares or lots of different funds, you may need a platform with more choice

It’s important to try and pick somewhere that’s cheap, otherwise those fees will add up over time. Freetrade is a good option because their stocks and shares ISA only costs £3 per month and they charge no commission for trades. This is why they’re one of the best places to buy stocks and shares.

Takeaway

We’re really lucky in the UK to have the stocks and shares ISA.

Try and make the most of your allowance each tax year and future you will be very grateful!

Most good investing platforms should offer you a stocks and shares ISA. Taking advantage of this is a vital way to reduce how much tax you pay on investments.

Happy ISA season!