We can't say for certain what will happen in the future, but we can say with certainty that 2022 will be unpredictable and full of surprises.

There are decades where relatively little happens, and then a few years where decades happen. Lately it surely seems like we're going through the latter. As always the best preparation for times of change is having secure personal finances.

If you haven't already, you would definitely want to look into opening an Individual Savings Account, or ISA for short. Not only is it a great way to make your money grow and actively benefit from it, but it also comes with a wide array of perks and benefits that make it much more useful than a traditional savings account.

What Is An ISA

An individual savings account is an account where your savings earn a consistent interest, which in turn is tax free, and allows you to benefit more from your financial activity. This means you can actually use the money in the account to invest in other financial instruments which will not be subject to the capital gains tax or a personal income tax.

The amount you can use in the account is up to £20,000, and has been for the past several years, but is subject to change in the future. With that being said, there are actually a few different types of ISA accounts you can open: cash, stocks and shares, lifetime, and innovative finance.

As we've mentioned before, what makes an ISA unique is its tax-free status on capital gains and return on investment, so using that account for specific investments is an important feature to use. For this you will want to open a stocks and shares ISA, which will allow you to invest in the stock market as well as securities, among other instruments. In this manner, your investment simultaneously saves tremendously on taxes, as well as earns an interest on themselves, compounding the account holders' profits.

Choosing and Opening An Account

If you already have an ISA account, you can actually transfer it to another bank of your choice. Whether you start from scratch or have already opened an account, there's a few key things you want to keep an eye on when considering a new bank.

Fees in particular can vary greatly between banks, and they have a serious impact on your bottom line. Other charges may exist, such as an annual charge, or fee charged for transferring the account.

Other than that, if you do end up using your ISA to invest in shares and stocks, then you know that the features involved in performing those actions can vary greatly as well between banks. First and foremost you'll want to have access to a trading platform you are comfortable and happy with. You will also want to check out the various options that you'll be able to trade with. Another aspect to consider is the bank's actual customer satisfaction, particularly in regards to customer service, responsiveness, and attitude towards the client.

Getting Started

Some banks offer a free demo of their ISA features and platform. You can book one whenever you feel like it, and get to know exactly what you're in for, the bank's particular features, getting your questions answered, and simply get a feel for how you feel about a particular bank and service.

Once you do decide on opening an account, the process is quite simple: you'll need an ID, a UK residence, your tax identification number (codice fiscale for Italian clients), and a smartphone. From there on the rest is up to you.

An ISA is a great and easy way to positively impact your net income simply by not having to pay taxes on earnings made through the account, and thus is a great choice for beginning investors to make the most of their first steps into their long-term investment journey.