It’s easy to feel a bit overwhelmed when wanting to invest as there are so many decisions to make – how much to put in the markets, what to buy and when to sell.

You needn’t be stressed as this series aims to give you all the information to make investing a lot easier.

One of the first decisions you’ll need to make is which investment platform to use. By this we mean the company which provides your ISA, SIPP (self-invested personal pension) or dealing account, such as AJ Bell Youinvest.

When you sign up to an online platform you’ll have the choice of different accounts and it’s important you pick the right one for you. You can broadly invest in all the same assets in these accounts, but there are differences to tax, restrictions on the amount you invest and how long the money is locked up.

THE ISA ACCOUNT

A Stocks and Shares ISA lets you withdraw your money at any time. The advantage of an ISA is that you don’t pay any capital gains tax when you sell an investment that’s made you a profit. You also don’t pay any income tax when any of your investments pay you a dividend.

You can pay up to £20,000 into an adult ISA each year, although you must deduct any money that you’ve already paid into other ISAs this tax year (such as a Cash ISA or Lifetime ISA).

THE SIPP ACCOUNT

Another option is a SIPP which is where you run your own pension pot. This also has tax benefits where you get tax relief from the Government.

For example for every £8,000 you contribute to your SIPP, the Government pays in an extra £2,000 – and if you’re a higher-rate tax payer you can claim even more tax relief.

Anyone under the age of 75 can pay into a SIPP – even if you are not earning you can contribute up to £2,880 each tax year and receive tax relief on top.

Most people can pay up to £40,000 into their pension each year, as long as they earn that amount, but the limit is lower for some very high earners.

However, you need to be aware that your money is locked up and you won’t be able to access it until you are at least 55 years old. When you do access it you’ll pay income tax on some of the money you withdraw, unlike an ISA.

THE DEALING ACCOUNT

Your third option is a dealing account. This allows you to invest in all the same assets but comes with no tax benefits. There are also no restrictions on how much you can pay in or on withdrawing your money.

Often people will use this when they have exhausted their annual ISA allowance but don’t want their money tied up in a pension (or have already maxed out their annual pension limit).

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