Can an ISA at Halifax beat inflation?
Stubbornly high inflation and negative real interest rates are causing headache for all of us. UK inflation was 9.2% in 2023 February. It also raises the question, where can savings be best shielded from inflation? For UK residents, an Individual Savings Account (ISA) here is generally a great way of growing your savings tax free.
Luckily, Halifax does offer stocks and shares ISAs, so it is one of the places where your investments could weather the inflation.
Investing in stocks and shares are a good vehicle to try to preserve the value of your money during periods of high inflation. Stocks and shares ISAs offer that better option with the usual ISA tax benefits.
If you want to compare Halifax's pitch with other providers, find out which are the best brokers that offer stocks and shares ISAs in our top 5 recommendations!
How do stocks and shares ISAs help protect your money?
Let's see why stocks and shares ISAs can help mitigate the negative effects of inflation and why you might want to consider opening a stocks and shares ISA account. Inflation can have a negative impact on your savings and investments, as it will erode the value of your cash holdings. You should try to invest as much of your money as possible during periods of high inflation.
Here are some of the main points on how stocks and shares ISAs can potentially help protect your money from inflation:
- Higher returns: Stocks and shares ISAs invest in stocks and shares, which have the potential to provide higher returns than traditional savings accounts, especially over the long term.
- Diversification: Investing in a variety of stocks and shares can help spread risk, which can protect your investments against market fluctuations and inflation.
- Tax efficiency: The advantage of a stocks and shares ISA is that any gains you make on your investments are tax-free.
Investing in stocks and shares carries a degree of risk, and the value of your investments can go down as well as up. However, over the long term, a well-diversified portfolio of stocks and shares has a better chance of outperforming inflation and have provided investors with a hedge against inflationary pressures.
What about cash ISAs – you might be wondering?
If you already have a cash ISA, which is a savings account, you might want to consider transferring to a stocks and shares ISA, an investment account, as cash or fixed-rate instruments cannot compete with inflation under current market circumstances.
Stocks are shares ISAs can do better during inflation than cash ISAs, because:
- Your returns aren't tied to any fixed interest rates as with cash ISAs, and stocks and shares ISAs could offer higher returns
- By offering higher returns than cash ISAs, stocks and shares ISAs have a better chance at competing with inflation even if they don't necessary beat it
- Stocks and shares ISAs carry higher risk than cash ISAs, because as with any investment, your returns depend on how your assets are doing on the market
If you want to learn more about how inflation works, check out our dedicated page hub on it.
So let's find out more about what exactly Halifax offers!
Basic info about stocks and shares ISA at Halifax
When it comes to investing in stocks and shares ISA in time of high inflation, it is especially important to max out your yearly allowance of £20,000 for the tax year. It is also important to diversify your portfolio. You should consider choosing a broker that offers the widest range of assets. We compared the product selection at the top brokers offering ISA, so consult our best brokers for ISA page. You might also want to consider checking if the provider has a maganed ISA, which means the broker will take care of your investments for you.
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Stocks and shares ISA available
|
Yes |
|---|---|
|
Stocks and shares ISA interest rate
|
- |
|
Minimum ISA investment amount
|
1 |
|
Stocks and shares ISA yearly allowance
|
20,000 |
|
Managed ISA availability
|
Yes |
|
Time to open account
|
1 day |
|
Inactivity fee
|
No
|
For a detailed analysis of Halifax services, check out our review for 2024
Stocks and shares ISA fees
When choosing a stocks and shares ISA account, you should consider the different fees a brokerage charges. To do that, see our top recommendations for brokers offering ISA.
Let's see an overview of non-trading fees at Halifax and its closest competitors!
|
Account fee
|
Yes
|
No
|
No
|
|---|---|---|---|
|
Custody fee
|
No
|
Yes
|
Yes
|
|
Inactivity fee
|
No
|
No
|
No
|
|
Withdrawal fee
|
$0
|
$0
|
$0
|
|
Deposit fee
|
$0
|
$0
|
$0
|
And here's an overview of the trading fees:
|
US stock fee
|
Commission-free, but 1.25% conversion fee for international trades | £7.5 per trade, or £1.5 per trade for regular saving plans. For tax-advantaged accounts, there is also an annual service fee. | £9.95 per trade |
|---|---|---|---|
|
EU/UK government bond
|
-
|
-
|
$12.4
|
|
US Treasury bond
|
-
|
-
|
-
|
|
Fund trading fee
|
$23.8 | $1.1 | $3.8 |
|
Stamp duty fees
|
0 | 0 | 0.5 |
You might want to check Halifax's trading account offers, which could also help you preserve the value of your money, albeit without the tax-benefits.
Consider the option of opening a trading account with Halifax, which can offer an even wider range of products that can help you offset the negative effects of inflation, albeit without the tax benefits. Read our review of Halifax to find out what markets they give access to and what trading accounts they have.
With a trading account, you are likely to be able to have access to more asset (including forex and CFDs) which could have more returns but are also riskier.
Our expert team here at BrokerChooser specializes in helping you find a broker that best suits your needs We have reviewed over a 100 brokers based on BrokerChooser's unique methodology.
If you have any feedback or questions, feel free to contact us via email!
Check out this short video for a behind-the-scenes peek into how our experts personally test and evaluate brokers.
Further reading
- Everything you wanted to know about ISAs
- What is an ISA: an in-depth guide to tax-advantaged savings for UK residents
- How much can you put in an ISA?
- How many ISAs can I have?
- What is a Lifetime ISA and how best to use it?
- How to open a Lifetime ISA
- What is a cash ISA?
- What is a Junior ISA?
- What is a flexible ISA?
- What is an Innovative Finance ISA?
- How to transfer your ISA?
- How does an ISA work?
- Which is the better investment: pension or ISA?
- Is ISA only for UK citizens?
- What is the safest ISA?
- What happens to my ISA if I move abroad?
- Does an ISA beat inflation?
- Interest on cash ISA: much do they pay?
- IBKR offers global access with local benefits for ISA holders
- Does Halifax offer ISA accounts?
- Is Halifax good for UK services like ISA?
- Can you transfer an ISA to Halifax?
- Halifax ISA fees explained
Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology.
