For anyone considering starting out on the savings road, the
announcement from the UK’s Chancellor of the Exchequer that the yearly Individual Savings Account (ISA) allowance is to be moved from its present level of seven thousand two hundred pounds to ten thousand two hundred pounds is deeply welcome indeed and will probably prompt many prospective investors to open an ISA as the first move in starting to invest for the future.
This big rise in the maximum limit that savers are able to invest annually is a powerful sign that the UK Government wants citizens to save more using this type of investment.
For those not familiar with ISA’s (Individual Savings Accounts), a short summary may be beneficial. ISA’s are now over ten years old and even before the news from the Chancellor they had been regarded by many as a stable and reliable form of tax free saving.
A further benefit is that no income tax is payable when you invest in an ISA. Add to that the fact that no capital gains are payable on an ISA and the attractions of this type of saving become even more obvious.
Any taxpayer.A taxpayer who is over the age of sixteen can start an isa savings account and they may do so with as low an investment as ten pounds. This illustrates a important point in the Governments thinking
behind the setting up of ISA’s – they are intended to encourage more people who have never saved before to start making provision for times ahead.
Another plus point for ISA’s is their versatility. You can select how you want to invest. There are varied ways that are available when saving in an ISA ranging from cash ISA’s to stocks and shares ISA’s. You simply opt for the one that you feel to be right for you.
A lot of people see investing in a cash ISA as a very secure sort of investment because the returns are likely to be fixed and should be reliable. On the other side of the coin stocks and shares ISA’s are thought likely to yield more but the snag is that a much higher
level of risk attaches to this variety of investment.
At the present time the maximum amount that you can invest into a mix of ISA investments is ten thousand and two hundred pounds and the maximum that may be invested into a cash ISA is five thousand one hundred pounds. For savers whether new to investing or not, ISA’s are a very attractive and flexible sort of saving and should not be dismissed when looking at possible investments.
