It keeps getting harder for folks to make their money work for them. Interest rates are heading in one direction only. Cash ISAs might be below a couple of percent soon enough. Regulations are putting a squeeze on renting out a buy-to-let. Through it all, the Stocks and Shares ISA looks better and better by comparison. 

Those of us who have these accounts got a boost recently too. The new Budget left ISAs well and truly alone, even directly stating the generous £20k deposit limits were guaranteed until 2030. Most pleasingly, there weren’t even any rumours circling around about ending the tax-free nature of these accounts. I reckon those in charge have realised the Stocks and Shares ISA isn’t worth going after. 

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

How much?

A good way of taking advantage of these accounts is to look at what kind of cash return I could get. Say I wanted £300 a month. That’s a nice little target, even if I’m not retiring on it. How much would I need to get it?

A dividend-focused portfolio targeting 5% returns a year requires a £72k lump sum. That’s fine and dandy if I was looking to withdraw, but what if I wasn’t? What if I wanted to maximise my return and go for the oft-mentioned 10% a year figure? Then I’d need a £36k lump sum instead. 

Of course, one criticism of the 10% figure is that UK stocks have missed that target in the last few years. Even if we expect underperformance to continue, and the long-term data of British stocks and shares suggests it won’t, we have an ace in the hand. The Stocks and Shares ISA offers me near-complete geographic freedom. 

I could buy the shares in Dutch semiconductor firm ASML, Danish pharma giant Novo Nordisk or Japanese gaming titan Nintendo all without getting up off the sofa. That’s not even mentioning the undisputed king of stock markets, at least in this century, just across the pond. 

One to consider

Apple (NASDAQ: APPL)  is one American stock I hold. I’m not aiming for a repeat of its frankly unbelievable growth, up 60 times or so in the last 20 years however. It’s the biggest company in the world now. Its products are found (even saturated) in every major market. It’s also trading at 30 times earnings so is undeniably expensive.

But as far as mature companies go? I think it’s a great one. Revenue’s still growing, up 8% on  average in the last five years. Pair that with huge cash reserves, modest debt and one of the most loyal fanbases the world over and I’m pretty happy with it. Oh, and it’s got billionaire investor Warren Buffett’s stamp of approval too – it’s his biggest holding.  

No one has a crystal ball when it comes to investing, but I reckon Apple’s a stock worthy of further research.