Mike puts £20,000 into a Stocks & Shares ISA every year, invested in a global index fund. He never pays a penny of tax on the growth — no capital gains tax, no dividend tax, no income tax. Ever.
His colleague Dave invests the same £20,000 each year but in a regular investment account. Every year, Dave pays dividend tax on distributions and will pay capital gains tax when he sells. Over 20 years, that tax drag compounds. Mike's ISA is worth significantly more — potentially £100,000+ more — from the exact same investments.
The ISA allowance is £20,000 per year and it doesn't roll over. If you don't use it by April 5th, it's gone forever. Even if you can only put in £200/month, do it inside an ISA.
→ Action: Open a Stocks & Shares ISA this week. Set up a monthly direct debit.