Buying shares means that you are buying a stake in that company. This can be risky as f the company does well, the value of the shares will rise but if the company does badly the value of the shares will fall or in owrst case scenarios have no value at all.
Pooled or collective investments
Pooled or collective investments are a single investment fund made up from small amounts from many people.
- Authorised Unit Trusts
- Open Ended Investment companies (OEICs)
- Investment Trusts
- Exchange Trade Funds
- Unit linked life assurance
- ISAs (see next section)
Read more online
Individual Savings Accounts (ISAs)
An ISA offers tax-free returns and can be a cash ISA or a longer term investment. All profits are tax-free, apart from the 10 per cent tax credit which is deducted from dividend payments before you get them. You also don’t pay Capital Gains Tax on gains (profits) from investments in an ISA.
ISAs have strict rules – See how much you can pay into an ISA each tax year.
From 1 November 2016, Junior ISAs are available especially for children.