ISA
What is an ISA?
An Individual Savings Account. This is a government initiative to encourage people to save for their future. The benefit offered from the government is that any proceeds or income generated from these schemes is virtually tax free. For most people, this is much more tax efficient than saving in a bank account. An ISA also offers a far greater range of investment types than a bank account which means that your money could work much harder for you.
What types of investment can be held in an ISA?
There are two types of ISA available.
Cash ISAs are only able to hold cash in the same way as a bank account. Although this pays an interest rate with no tax deducted, this rate is often dependent on the Bank of England Base Rate (Currently 0.5%p.a.) This is currently at it’s lowest rate ever.
Stocks and Shares ISAs are in fact able to invest in a wide range of investment types. These include property, shares, government backed securities and many other opportunities to suit all investors. These types of investments have the potential for greater returns than cash but could also carry an element of risk to initial capital.
How much can I invest into an ISA?
Due to the highly desirable tax efficiency of an ISA, the government has put an annual maximum limit on the amount any individual can invest.
Total Maximum £7,200
Maximum in Cash £3,600
Maximum in Stocks and Shares £7,200
From October 2009 These limits will be increasing for anyone age 55 or above to:
Total Maximum £10,200
Maximum in Cash £5,100
Maximum in Stocks and Shares £10,200
From April 2010 these limits will apply to all.
You can invest either with a lump sum or with regular monthly payments.
What can I do with my existing ISA’s?
If you have ISAs from previous tax years that aren’t doing as well as they should be, they can be moved without losing their tax efficient status. In addition, you will still be able to invest your current years allowance.
What is an ISA?
An Individual Savings Account. This is a government initiative to encourage people to save for their future. The benefit offered from the government is that any proceeds or income generated from these schemes is virtually tax free. For most people, this is much more tax efficient than saving in a bank account. An ISA also offers a far greater range of investment types than a bank account which means that your money could work much harder for you.
What types of investment can be held in an ISA?
There are two types of ISA available.
Cash ISAs are only able to hold cash in the same way as a bank account. Although this pays an interest rate with no tax deducted, this rate is often dependent on the Bank of England Base Rate (Currently 0.5%p.a.) This is currently at it’s lowest rate ever.
Stocks and Shares ISAs are in fact able to invest in a wide range of investment types. These include property, shares, government backed securities and many other opportunities to suit all investors. These types of investments have the potential for greater returns than cash but could also carry an element of risk to initial capital.
How much can I invest into an ISA?
Due to the highly desirable tax efficiency of an ISA, the government has put an annual maximum limit on the amount any individual can invest.
Total Maximum £7,200
Maximum in Cash £3,600
Maximum in Stocks and Shares £7,200
From October 2009 These limits will be increasing for anyone age 55 or above to:
Total Maximum £10,200
Maximum in Cash £5,100
Maximum in Stocks and Shares £10,200
From April 2010 these limits will apply to all.
You can invest either with a lump sum or with regular monthly payments.
What can I do with my existing ISA’s?
If you have ISAs from previous tax years that aren’t doing as well as they should be, they can be moved without losing their tax efficient status. In addition, you will still be able to invest your current years allowance.
Want more information?
Call David on 0845 170 20 20, mob 07855 799 807 or email David and I put you in touch with a partner Financial Adviser
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