If youre looking to invest or want to make a joint investment with someone else, then a unit trust could be right for you.

Unit trusts are collective investments (also known as funds), which allow a group of people to pool their money into a single fund.

A fund manager is then able to invest on your behalf in a wider range of assets (such as shares, bonds and property) than if you invested alone.

Each fund is divided into units: the number of units your investment buys represents your share of the fund.

Benefits of investing in a unit trust

• Buying power. As a unit trust trades in large volumes, the costs to you are lower than if you were to make the same investments yourself.
• A wide range of funds. Each fund can be managed in a different way and with different objectives. To help reduce risk its a good idea to not put all your eggs in one basket. You can spread your investment across a number of funds. For more information visit our spreading risk page.
• Instant access. Although there is no fixed term, which means you can choose to sell a unit trust at any time, you should consider investments of this type as a medium to long-term commitment of, ideally, at least five years.
• Invest in a unit trust jointly. You can invest in a unit trust jointly with other people or even on behalf of other people. This is only the case if the investment is held outside of an ISA.
• Can be invested in as an ISA. You can invest in most unit trusts as a stocks and shares ISA. This means you wont pay personal income tax or capital gains tax on any income or growth from your investment.
• You can only invest in a stocks and shares ISA alone, not jointly like you can when the unit trust is held outside an ISA.For more information visit our stocks and shares ISA page.
• The same investment beyond your ISA allowance. If youve reached your annual ISA limit, a unit trust (although not as tax-efficient) gives you the option to continue investing in the same range of assets.
• Unlimited investment. Its usually best to make the most of your ISA allowance, but even if youve reached your annual ISA limit you can continue to invest in a unit trust. Theres no limit to the amount you can invest in a unit trust and youre allowed to invest in as many as you like. For more information visit our unit trust page.

Please remember the value of an investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

The tax efficiency of ISAs is based on current rules. The current tax situation may not be maintained. The benefit of the tax treatment depends on individual circumstances.