Tax Wrappers
Enormously important but confusing
These are an administrative necessity to ensure that investments for which tax concessions are granted are used in the way the government intended.
To some extent all investment products are wrappers. But we are concerned on this page only with tax-advantaged wrappers where you control the contents.
Do not expect product-providers to observe this distinction. It is usual for a managed portfolio of funds in an ISA wrapper (e.g.) to be advertised as just an ISA. In fact it is a product in an ISA wrapper.
Providers of wrappers usually charge an annual fee for the administrative service. Providers will also expect to earn dealing or management fees from the investments you hold within the wrapper.
ISAs
So an ISA is a wrapper, not an investment. You cannot "invest in an ISA", no matter what the advertisements say. You can only invest in X, Y or Z. Then, you can chose to hold X,Y or Z in an ISA. Financial service providers like to blur this distinction so that they can sell you the whole package.
Some ISAs charge up to 5% initial fee and 1.5% per annum thereafter. This will kill your returns (compounding). And don't think you will get any special management expertise. These fees will be spent on sales commissions and marketing expenses. Any hot investment manager (if there is such a thing) will be assigned to high profile specialist funds. Not to general funds aimed at the inexperienced public.
For the detailed ISA rules
https://honestmoneynow.co.uk/wrappers/isas
LISAs
‘LISA’ stands for ‘Lifetime ISA’. It is a special form of ISA aimed at the young aiming to buy their first house. Complicated but worth the effort.
https://honestmoneynow.co.uk/wrappers/lisas
Child Funds
Various ways of giving to children.
https://honestmoneynow.co.uk/wrappers/child-funds
SIPPS
Self-Invested Personal Pension Plan. You don’t have to buy a product, you can do it yourself.
https://honestmoneynow.co.uk/wrappers/sipps
Pension Plans
‘Pension plans’ should not qualify for this page since the contents are usually controlled by others. But they are so complicated, and with such variety, that it’s helpful to tag them here. See also the pages in the lesson modules.