The ISA investment rules are broken down for each investment component as follows:

Stocks and shares component
Almost call unit trusts, OEICs, FSA-recognised UCITS funds and UK-listed investment trusts are eligible for ISAs. Direct investment may be made in shares listed on any recognised stock exchange. EEA government bonds and fixed interest securities of companies listed on any recognised exchange with more than five years to redemption are also eligible.

Cash is an eligible investment, but only for future investment - it cannot simply be left uninvested in a stocks and shares ISA.

The main exclusions are bonds with under five years to redemption, cash, quasi-cash funds and property funds.

Cash component
The eligible investments are building society and bank deposits, money market funds which hold cash rather than short-dated securities and ISA-eligible National Savings products, excluding Savings Certificates.

Insurance component
A special ISA-only life policy is the only eligible investment, other than cash to meet future premiums. The policy must be a life assurance contract on the life of the ISA investor alone, but may offer subsidiary health-related benefits such as critical illness cover. It cannot be a pension or an annuity and must terminate automatically if it ceases to be held in an ISA.