Compare Income Fund ISAs
Pick the best Income Fund ISA to make the most of this year’s tax free allowance.
Investment ISAs put your capital at risk & you may get back less than you originally invested
- Fund Choice: Popular corporate bond fund that pays a monthly income. Manager Sajid Vaid believes investment grade (high quality) company bonds may be the ‘sweet spot’ in the fixed income market, delivering modest income while keeping risks in check. Capital at risk.
- Invest From: £25 pm
Why we like it: A fund with a conservative approach to bond investing. The focus is on quality companies that are in good financial health and generate enough cash to keep paying bondholders. Aims to provide a relatively steady income and a small amount of growth, without taking excessive risks. It could help diversify a portfolio focused on shares, or be used as a way to limit volatility during tougher times for stock and bond markets.
- Fund Choice: High income yield fund suitable for long term investors drawing regular monthly income from their portfolios. Capital at risk.
- Invest From: £25 pm
Why we like it: If you are looking for a high income yield this fund is suitable for long term investors drawing regular income from their portfolios. With a focus on high yield bonds and shares, the fund manager is an experienced bond investor who has a flexible approach to seeking out the best income opportunities.
- Fund Choice: HL blend their favourite equity income funds to provide investors an investment which aims to deliver long term returns & reliable monthly income. Capital at risk.
- Invest From: From £25
Why we like it: The Hargreaves Multi Manager High Income fund aims to deliver a high monthly income to clients by blending different types of funds and moving between different areas of the market when more attractive opportunities emerge. HL also aim to grow this income payment over time and therefore may invest in higher risk smaller companies they believe offer great potential for long term capital growth.
- Fund Choice: Aims to provide a dividend yield above the FTSE All-Share Index. Invests in UK equities judged to offer high yield, above average prospects of dividend growth and long-term capital growth. Income paid twice yearly. Capital at risk.
- Invest From: £25 pm
Why we like it: Getting paid a regular income is a priority for many investors. Whether you’re in retirement, or want to boost your existing income, an equity income fund could be right for you. Even if you do not need income now, you can opt to reinvest it to boost capital growth. An emphasis on dividends and dividend growth makes this fund a more traditional UK equity income fund, in our view, so it could help form the foundation of an income portfolio.
- Fund Choice: Actively managed fund that aims to provide an income by investing in UK companies which meets ethical guidelines. Capital at risk.
- Invest From: £25 pm
The fund will invest in ethical companies based on thorough company analysis, with ethical and socially responsible criteria reviewed at the point of investment and quarterly thereafter. The Fund invests at least 80% in UK quoted companies with a bias towards small and medium sized companies (those with a market value of less than £4 billion).
Income Fund ISAs
Income fund ISAs offer you the flexibility to make the most of your ISA allowance in a way that suits you. You can choose from income funds that invest in equities or funds that invest in corporate bonds.
If you’re looking to earn an income from your investments, there are a wide range of income fund ISAs to choose from. These can help you to reach your personal investment goals.
Funds and investments are a great way to income invest as you can spread the risk over a range of equities or assets. Income Funds invest in portfolios of companies that pay out constant dividends. This is less risky than investing in individual shares.
By making these investments within an ISA wrapper, you can make money and avoid paying income tax on your capital.
Compare the latest income fund ISAs in our tables to find the right one for you.
What is an Income Fund ISA?
An income fund ISA is a way of using your ISA allowance with the aim of providing you with a regular tax-efficient income payment on your investment or savings. Income may be paid on a quarterly, semi-annual or annual basis, so you can choose an option to suit your savings goals.
You are permitted to invest all or part of this amount in an Investment ISA, or some of this amount in a cash ISA and the remainder in stocks and shares
Why Invest in an Income Fund ISA
Check our Fund Supermarket for fund options. Here’s why using our facility could be right for you:
- 1.Low charges – Many of the income funds available to you can be accessed at no initial charge. What’s more, many annual management charges offer a discount of up to 0.20% per year.
- 2.Great choice of funds – Over 1500 funds to choose from including leading UK income fund managers such as Invesco Perpetual, Jupiter and Fidelity.
- 3.Management of your funds online – Our Fund Supermarket service provides you with online access so you can monitor your investment funds 24/7, wherever you are.
- 4.Customer Services Team – We are here to help you if you have any queries.
What Type of Income Funds are Available?
You can select income funds covering all major geographical regions of the world.
There are a variety of income funds to choose from, with different investment risk profiles and growth objectives. Choose from income equity funds, bond funds, property funds, specialist funds, and cash funds.
By spreading your investments over a range of options and by choosing your investments carefully, you could see much higher returns than simply using a Cash ISA.
Frequently Asked Questions
Can I transfer my Cash ISA into a Stocks and Shares ISA?
Yes, you can transfer from your Cash ISA to a Stocks and Shares ISA at any time. However, do check you won’t lose out by transferring, as some Fixed Rate Cash ISAs may charge a fee or void your interest if you surrender your policy before the fixed term has ended
Do I pay tax on a monthly income ISA?
No, all payments from an Income ISA is completely free from tax.