A Stocks and Shares ISA is a type of savings account that allows you to invest in a range of different investment products, such as shares, funds, investment trusts, bonds, and exchange-traded funds, among others. It is a tax-efficient way to invest for your future, as any income or capital gains your investments make, or any interest your cash earns, is tax-free. If the stocks or funds in your ISA pay out dividends, you won’t have to pay tax on these either.

You can only pay into one Stocks and Shares ISA in each tax year, but you can open a new ISA with a different provider each year if you want to. The maximum amount you can invest in a Stocks and Shares ISA is £20,000 per tax year. You can withdraw your money at any time without penalty charges.

It is important to note that investing in a Stocks and Shares ISA involves risks, and the value of your investments can fall as well as rise, meaning you may not get back what you invest. Therefore, a Stocks and Shares ISA should be seen as a medium to long-term commitment, and you should be prepared to invest for at least 5 years.

Pros of a Stocks and Shares ISA include the investment choice available, which is wider than that of a cash ISA, and the tax benefits. However, fees are a key consideration in investing, and you might have to pay an administrative charge to the ISA provider. If you are considering investing in a Stocks and Shares ISA, it is recommended to get regulated financial advice before making an investment.