£50k of savings? I’d rather invest in a Stocks and Shares ISA than Bitcoin or buy-to-let

A Stocks and Shares ISA is a brilliant way to invest. All my returns will be free of income tax and capital gains tax for life, vital with UK taxes at a 70 year-high.

It only takes a few minutes to open an ISA through an investment platform and the fees are as low as they’ve ever been.

If I had a lump sum of £50,000, I’d immediately stick £20k into an ISA using this year’s allowance. On April 6 next year, when we get a new allowance, I’d stick in another £20k and the remaining £10k the year after that.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

I’m investing tax free

What I wouldn’t do is buy Bitcoin. I already have a tiny crypto holding, and that’s enough. Bitcoin is volatile, price movements rest almost entirely on sentiment, and it doesn’t generate any income.

One day I could kick myself, of course. History shows that Bitcoin could easily take off again and double or triple in value. But it could just as easily fall. Unlike shares, there’s no way of assessing what its real value might be.

I’ve always found buy-to-let tempting, only to resist because it’s too much bother. Right now, landlords are fleeing the sector, as the upcoming Renters’ (Reform) Bill threatens stringent new rules.

The next few months could throw up a buying opportunity as property prices crumble, but buy-to-let mortgages are getting pricier and harder to source. It’s all too much worry.

I see a more tempting opportunity in FTSE 100 shares. They’ve dipped since breaking the 8,000 barrier in February, and many look really cheap today.

Investors are wary as they wait to see when the bungling Bank of England will finally get on top of inflation. Yet I think the recent reversal makes now a great time to buy. Better today than when the index is back above 8,000.

I’ve just bought paper and packaging specialist Smurfit Kappa Group, which offers solid long-term dividend income and growth prospects, yet trades at just 7.59 times earnings. Its shares are in the doldrums but I’m hoping they’ll recover when consumers start shopping again.

Some great shares out there

I also bought consumer goods giant Unilever, another solid income and growth stock that should get its mojo back when the outlook brightens.

I’m tempted by FTSE 100 tech-focused firms RELX and Sage Group, which may benefit from the artificial intelligence revolution. Plus I’m keen to increase my stake in dirt-cheap, high yielding income stocks like Lloyds Banking Group and Legal & General Group.

Housebuilder Taylor Wimpey is really cheap at 5.82 times earnings but yields 8.55%. Its shares are an easier way to play the property market than buy-to-let.

Naturally, buying shares is risky. The stock market recovery could take longer than we’d like. Those dividends could be cut. I’d spread my risk by buying a dozen different shares, and with luck the winners will outnumber the losers.

By holding for a minimum 10 years and ideally much longer, I can overcome short-term stock-market volatility. Over the long run I would expect my Stocks and Shares ISA to deliver a superior tax-free return to Bitcoin or buy-to-let, with a lot less stress and bother.