Isa Isa Baby: growth and income funds

WHETHER you are seeking to increase your nest egg or looking for regular returns on your investment, the important thing is that your Isa fund works hard with your money. With interest rates currently at rock bottom, many will be looking to equities over cash.

Investment expert Philippa Gee says “stocks and shares Isas are worth it for investments of between 5 and 10 years and as such sit nicely between cash Isas and pension funds.” Although there is still a strong case to be made for fixed rate cash Isas, for those who are able to tie up a lump sum for the long term, stocks and shares Isas give customers the potential for the greatest returns. For example, a customer who had invested their full Isa allowance of £10,690 into a stocks and shares Isa on 6 April 2011 – taking a medium risk growth portfolio paying an average return of 6.92 per cent – could expect a gain of £739.05 per annum.