• What is an ISA?
  An ISA (which stands for ‘Individual Savings Account’) allows you to save money without having to pay any further tax on your returns. The Government introduced ISAs to encourage people to save for long-term goals such as retirement. UK residents over the age of 18 each have an ‘allowance’ of £7,200 each year to save within ISAs. Find out more.
  
  When you are planning your finances if you have, say, £10,000 to save, it makes sense to consider putting the first £7,200 into ISAs which will save you tax*, and then put the rest into options outside an ISA.
• What’s the difference between a stocks & shares ISA and a cash ISA?
  Stocks and shares ISAs invest in funds across a range of ‘assets’ such as shares, bonds and property. Cash ISAs are cash deposit savings that offer variable or fixed rates of interest.
  
  Stocks and shares ISA funds give you a return that varies because they reflect the performance of the underlying assets. They generally offer a greater potential return than cash savings over the long term but also come with more ups and downs along the way. Remember that stock market investments are different to cash savings. While cash savings are secure, stock market-based investments will fluctuate in value; neither the value of the investment nor any income from it is guaranteed, and you may get back less than you paid in.
• How do I choose a cash and stocks & shares ISA?
  When you choose cash ISA, you need to consider the rate of return and the access to your money offered by the product.
  
  With a stocks & shares ISA, you will need to choose one or more funds to invest in and take account of their different investment objectives. There are literally thousands of ISA funds offered by hundreds of providers to choose from in the UK.
  
  The Co-operative offers both types of ISA; cash ISA from The Co-operative Bank as well as 6 ISA funds in a stocks & shares ISA from The Co-operative Investments. Your choice(s) will depend on your attitude to risk, your savings goals, your preferences and the mix of funds you need to achieve a balanced portfolio.
• How much can you invest in an ISA?
  You can invest a total of £7,200^ each tax year through a stocks and shares ISA. Of the £7,200^, you can save up to £3,600^ through a cash ISA. If you choose to save with both a stocks and shares ISA as well as a cash ISA, you can use the same or different ISA manager for each of these.
• Is the stock market suitable for me? Why should I invest in stocks and shares?
  While past performance is not a reliable indicator of future results, over the long term the stock market has performed better than some other types of investment such as cash and bonds. But as we all know from events of the past 18 months or so, the stock market goes through good times and bad times along the way, and you may not get back what you put in.
  
  If you have money to put away for 5 years or more, it makes sense to take advantage of the potential offered by the stock market to grow your savings, balancing this with a level of risk you are comfortable with.
• Why should I choose The Co-operative for my ISA?
  There are many reasons why The Co-operative may be an excellent choice for your ISA:
  • The Co-operative is financially strong, secure and stable
  • Both cash ISA and stocks and shares ISA are available
  • The Co-operative Investments offer 6 Unit Trust funds for your stocks and shares ISA to suit a wide range of needs and preferences; you can choose one or more funds for your ISA
  • You can invest in our stocks & shares ISA using lump sums from £1,000 or through a regular savings plan starting at £50 a month Find out more
• What stocks & shares ISA funds does The Co-operative Investments offer?
  
  •UK Growth Trust – investing in UK household names like Vodafone and HSBC Bank
  • UK Income with Growth Trust – investing in UK companies to provide income as well as growth, with less risk than a fund that invests solely in shares
  • Sustainable Leaders Trust – investing in UK companies that excludes tobacco, nuclear power generation, armaments and other types of companies that do not meet our strict ethical criteria
  • Corporate Bond Income Trust – investing in high quality corporate bonds to provide a consistent income stream
  • European Growth Trust – investing in high quality European companies
  • US Growth Trust – investing in high quality USA companies
  
• When will the stock market recover?
  No one knows exactly when this will happen. It is likely that markets will start to rebound when signs of stability return to the global financial system.
  
  It’s important to remember that stock markets are driven by what investors think will happen in the future. When markets have had dramatic falls in the past, they can start to rebound even when news is still bad if investors foresee better times ahead.
  
  This makes market recoveries hard to time, so we encourage our customers to make sure that they do not miss out by keeping investments in the stock market when it’s appropriate.
• What is The Co-operative’s view of markets?
  Over the next 12 months, the view of our fund management team is:
  • Stock markets around the world are likely to remain volatile and at low levels
  • We expect interest rates to remain low with inflation expected to be around 2%, meaning that cash returns will become less attractive than in recent years.
  • We will continue to take a cautious approach on behalf of our customers, for example, by favouring companies that are less vulnerable to economic downturn.
  
  Over the long term, ie 5 years or more, the view of our fund management team is:
  • Stock market investments are likely to perform better than cash
  • There remains good opportunities to invest in companies that have a solid management team, apply a sound business strategy and overall, show good prospects for long-term growth.
• Can I afford an ISA?
  If you have money set aside in cash accounts, you can start a Co-operative Investments Stocks & Shares ISA from as little as £1,000. If you don’t have a lump sum already set aside, you can invest from as little as £50 a month into a Co-operative Investments Stocks & Shares ISA. The Co-operative Bank Cash ISA requires just £1 to open an account.
  
  Remember that unlike most other savings and investments, you pay no further tax* on your ISA savings, so it’s important to make sure that you use your allowance each tax year if you can. If you don’t use it, you lose it forever!
• Once I have an ISA, can I make changes to it?
  You can:
  • Switch funds with your stocks and shares ISA provider.
  • Change the monthly savings amount you contribute to your ISA.
  • Transfer your ISA from one provider to another.
  • Transfer a cash ISA to a stocks and shares ISA.
  
  However, it’s important to remember that if you actually withdraw money placed within an ISA in the same tax year, you will not be able to use that part of your allowance again.

*The information above regarding tax and ISA regulations is based on our understanding of the current position, which is subject to change. The tax treatment of investments will depend on an individual’s circumstances.

^ If you were born on or before 5th April 1960, increased ISA limits apply from 6th October 2009. You can invest up to £5,100 each tax year in a Cash ISA and your overall annual ISA investment allowance is £10,200. These higher limits will apply to all eligible ISA investors with effect from 6th April 2010.