It’s a medium to long-term investment that could be an option if you’ve used up your annual individual savings account (ISA) allowance and don’t want to lock your money away in a pension.
What are the main benefits?
You have the flexibility with a general investment account (GIA) to invest as much or as little as you want, and can contribute a regular monthly amount, a lump sum or both.
Choosing a GIA allows you to invest in a wide range of funds, shares and investment trusts. You can take regular withdrawals if needed and can access your money at any time. However, a GIA should be considered a medium to long-term investment of at least five years, ideally longer. This is because the value of investments can fall as well as rise and you may get back less than you invest.
GIAs can also be held as a joint account by up to four individuals.
Who can invest in a GIA?
You must be aged 18 or over and habitually resident in the UK to invest in a GIA. Speak to your financial adviser, if you have one, to confirm if you’re eligible for your chosen investment. If you don’t have an adviser, you can find one through MoneyHelper.
Is there an investment limit?
There is no limit on how much you can invest in a GIA. That’s why it may be an option if you’ve used up your ISA allowance and have more to invest.
Are there tax benefits?
Unlike an ISA or pension, there are no tax benefits in a GIA. Any dividends you receive from your GIA investments that exceed your annual dividend allowance and any interest distributions that exceed your personal savings allowance will be subject to income tax. Any gains you take from your GIA will be subject to capital gains tax (CGT). The amount of tax you will pay will depend on your personal tax situation and may be subject to change in the future.
You may wish to use a GIA as a way to ‘hold’ your investments until your ISA allowance renews at the start of each tax year.
Important things to think about
A GIA offers you the flexibilty to invest in many different investment funds, but it’s important you’re fully aware of the risks of each fund before you invest. Each investment fund has its own specific risks. Make sure you look at the details of each fund, and your provider will make these available to you in a Key Investor Information Document.
Get familiar with the basics
Discover more about the basics with our Learn section.