We no longer check to see whether Telegraph. To see our content at its best we recommend upgrading if you wish to continue using IE or using another browser such as Firefox, Safari or Google Chrome. The Isa system is popular but — as this paper consistently highlights — requires reform. It is needlessly cumbersome and its complexity deters people from making the most of their tax-free savings.

Swamped by confusing messages from Isa providers and promoters? These 10 questions and answers aim to set matters straight and ensure your allowance is used to maximum effect.

Anyone with savings or investments should have an Isa. Hold fire for best cash Isa rates — but lower your expectations. Where to find the best cash Isas. Ten steps to better Isa investing.

Halifax UK | Stocks and shares explained | Share Dealing

How I'm choosing my first funds. The best 'Isa shops' for first-time investors. Unlike a standard savings account, any interest earned on money saved in a cash Isa will not be taxed. If you opt for a stocks and shares Isa, there is no capital gains tax on profits and no tax on interest earned on bonds, while tax on dividends from shares is capped at 10pc and paid before you receive it.

Where any savings are within an Isa, no further tax is due. Savers can pay in only a fixed amount each year. These terms crop up increasingly and refer to companies through which, usually, investors buy funds such as unit trusts, Oeics or investment trusts, or shares.

Apart from Hargreaves, other major platforms include Bestinvest, Alliance Trust Savings, Fidelity Personal Investor, TD Direct Invest, Charles Stanley Direct and AJ Bell Youinvest. Competition has become fierce between these firms, driven by new regulations.

Choosing the right platform is crucial, in terms of both service and price. A wealth of information to help you compare platforms is available at telegraph.

Confusingly, platforms or brokers are not the only types of companies selling investment Isas. Historically, fund companies — such as Jupiter or Invesco — also sold their funds direct to investors. Cash Isa accounts — again, see below — are generally sold by established banks and building societies. Be careful not to muddle individual investments such as a holding in a single fund with the Isa itself.

An Isa account held with a platform or broker, for instance, can include any number of qualifying investments built up using many, successive years of Isa allowances. There are various costs involved when you put money in an investment Isa; minimising them can make a big difference to your returns over the long term. Which fund shop will be cheapest depends on a number of factors such as the amount you want to invest.

Costs can be about 0. If you prefer to hold shares — including funds traded as shares such as investment trusts and exchange-traded funds — look for a broker that levies no ongoing charge for holding them. Youinvest and TD Direct Investing charge nothing beyond a dealing fee when you buy and sell, although you have to meet certain conditions in the latter case. For example, are they specialised funds or diversified? Many investors, especially first-timers or those who do not have the time to review their investments regularly, will want broad exposure to the main stock markets of the world, so five tracker or stock-picking funds covering British, American, European, Japanese and emerging market shares would fit the bill.

But if your five funds are a mishmash of, say, a technology fund, a China fund, a Brazil fund and so on, you are probably exposed to too many specific risks and should consider spreading your money more widely.

You could do this by keeping your existing funds but adding others or by selling the current ones in exchange for a more diversified selection. If you do not have the confidence to pick your own investments, there is plenty of help at hand. A number of firms act as your own personal fund manager by picking funds on your behalf. All you have to do is fill out a simple online questionnaire, outlining your financial situation and attitude to risk. This enables the company to tailor the investments around your goals.

Fund shops, which act as investment middlemen through selling funds on their websites, often recommend certain funds. Produced by most brokers including Hargreaves, Fidelity Personal Investor and Bestinvest, they might tip funds out of the 1,odd available to UK savers, broken down by sector. Savers should not wholly rely on these lists. Bear in mind that the funds tipped are the favourite funds of the broker concerned, not necessarily the most suitable for all investors.

Over the years I have taken out several Isas with different companies. Should I leave them where they are? There is nothing wrong with having your Isa split across different companies and there are no limits on how many Isas you can hold, provided that you do not exceed the Isa limits in any one year.

But there are benefits of consolidating your Isas into one. By using one company to handle all of your Isa holdings — including different funds or shares — all of your investments will be in one place, making your investments much easier to monitor. However, the transfer process involves a lot of paperwork and can prove costly. There is often a transfer charge when you switch Isas, which can in certain cases price savers out of moving.

All individuals receive an annual allowance whether they use it or not.

Some savers will have built investments outside an Isa. With every new tax year, more of these investments can be moved inside an Isa to protect against future tax. It could save tax if the one spouse gives assets to the other in order for both of their allowances to be used to the full.

Any gains made on existing investments before they switched into an Isa could be subject to tax. There are three main types of cash Isas — instant access, fixed-rate and regular savings Isas. Instant access Isas allow savers to deposit and withdraw money as they need. Some accounts cap the number or total value of withdrawals, so check the terms and conditions carefully. These accounts generally pay variable rates of interest, which can rise or fall. Fixed-rate Isas are a good option if you know you can lock your money away for a fixed term, usually between one and five years.

They pay a fixed rate of interest for a set amount of time and the longer you lock your money away, the better the interest rate will typically be. Be aware, however, that you cannot access your money early without paying severe penalties. Savers are being warned to hold off immediate investments into fixed-rate cash Isas, as some improved deals may emerge before the April 5 tax year end. Regular savings Isas pay a fixed rate of interest over a set period as long as you make regular monthly deposits.

If you make withdrawals or fail to save the required amount each month you will usually face tough penalties. If you decide to move old cash Isas, make sure you follow the transfer process. Never simply withdraw the money — you will lose the tax-free benefit if you do. You can transfer a cash Isa into another cash Isa, or into a stocks and shares Isa. We want the same limits to apply to cash as to other types of Isa holding, and for savers to be able to move their money freely between the assets as their needs change over time relating to their age, risk tolerance and other factors.

For now, though, those who want to move their cash Isa from one provider to another have to follow a set process. Once you have found a new cash Isa that allows transfers in not all do , open an account there and complete an Isa transfer form.

The new bank or building society will then arrange the transfer, which should take no more than 15 working days. If it takes longer, your old provider must pay you interest at the new rate until the transfer is finished. Be aware that if you are moving money from a cash Isa into stocks and shares you may face an initial fee.

Some companies charge you to withdraw money or move to another provider. New to Isa investing? John Miles began to take stock market investing seriously five years ago — when he was already in his eighties.

In his working life he was a pilot, teacher and driving instructor. We make doubly sure by wrapping some of our holdings in a stocks and shares ISA, which costs us nothing, and also frees us from having to provide anybody with any paperwork.

Third, the question of risk. Conventional wisdom states that if you want more return you need to take more risk. You can increase your return enormously by careful attention to detail. Any individual share poses a risk. If you bet the farm on just one share you're obviously taking a horrendous gamble.

On the other hand, apart perhaps from property or a well-run business, I can't think of a safer place to stash my cash than a reasonably diversified portfolio of decent shares, carefully bought at sensible prices. Fourth, find a firm of brokers with an account you're comfortable with.

We've ended up as "execution only" investors. That means our broker desn't offer us advice on what to buy, and we don't ask for it. Fifth, avoid investment funds. Why pay pc a year to someone who is not smarter that you? Most of these fund managers couldn't invest their way out of a wet paper bag. They spend their time chasing short-term returns to look good to potential investors, rather than looking at the long-term. Perhaps it's worth mentioning that it's in the interests of the "experts" to blind us with science, and to sell us the idea that investment's so difficult that ordinary people can' t possibly cope without professional advice.

Turkeys don't vote for Christmas, nor does the fund management industry get richer by explaining that you that you don't really need its services. Sixth, a portfolio of shares or an annuity for your pension? Shares win, hands down, by a country mile.

You can access your own capital at any time if you really want to. And your dividends will give you a return of about 4pc, or even more, in real terms. Even though they're not actually index-linked the dividends of a decent company will grow more or less as fast as inflation, hopefully even faster. And - the cherry on the icing on the cake - unlike an annuitant's pension pot your portfolio remains your property for always.

You're free to do what you like with it: Seventh and last, you can learn a lot from your fellow foot-soldiers by belonging to a forum.

Stocks & Shares ISAs - Compare For The Best Deal at MoneySuperMarket

Like you they're at the coal face, the sharp end, trying to solve the same basic problem, and they give each other a lot of help by discussion and exchange of ideas. Many "investors" on the stock market are really speculators, hoping to make their killing by selling stocks for more than they paid for them. We belong to the minority of bona fide investors who are in it for the dividends. More specifically, we're dividend reinvestors. We don't look for growth when we're buying, but if growth happens - as it often does - we're not too proud to take occasional profit.

Add your voice to our campaign by sending your suggestions to Your Money, Telegraph Media Group, Buckingham Palace Road, London SW1W 0DT or email us at money telegraph. Find out how to invest in recovery with this free guide. Help protect yourself from Identity Fraud with CreditExpert. Howard Marks, an Oxford University graduate turned drug smuggler, made millions. Now he eagerly awaits royalty cheques. Paul Daniels wasted too much on Ferraris but has made a fortune on his home - despite the flood.

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By Telegraph personal finance reporters. This is because earnings on money saved in an Isa are protected from the taxman. What other types of company sell Isas?

What is the cheapest way to build up an Isa? Are there Isa options where I do not have to choose my own investments? Are Isas any use to me? Stock market not for you? Here are cash Isas explained 1.

What are my cash Isa options? How can I move my cash Isa? What follows are some of his tips to other first-time investors, based on his own experiences. The last thing you need is to be forced to sell something when the market's depressed. The kitchen coup — how cash shifted the balance of power over household chores. The inspector calls — and house prices jump. How the Ofsted effect could add thousands to the value of your house or send it sliding.

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