A Brief Account of the Recent Announcement from the Government about ISA Savings and What it Will Mean for the Financial Services Market in the United Kingdom
For anyone considering starting out on the savings journey, the
news from the UK’s Chancellor that the annual Individual Savings Account (ISA) allowance is to be increased from its current level of seven thousand two hundred pounds to ten thousand two hundred pounds is genuinely welcome indeed and may well tempt a lot of potential investors to open an ISA as the initial move in commencing to save for the future.
This hefty jump in the maximum limit that people are permitted to invest annually is a strong sign that the UK Parliament wants everyone to save using this type of investment.
For those not familiar with ISA’s (Individual Savings Accounts), a quick summary may be useful. ISA’s are now over ten years old and even before the statement from Alistair Darling they had been considered by many as a stable and safe 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 perks of this type of saving become even more obvious.
Any taxpayer.A taxpayer who is over the age of sixteen can begin an isa savings account and they may do so with as little an investment as ten pounds. This shows a key point in the Governments thinking
behind the creation of ISA’s - they are intended to persuade more citizens 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 investing in an ISA ranging from cash ISA’s to stocks and shares ISA’s. You can simply choose the one that you consider to be right for your circumstances.
Many people see investing in a cash ISA as a very secure type of investment because the returns are likely to be fixed and should be reliable. On the other hand stocks and shares ISA’s are thought likely to yield more but the downside is that a far higher
element 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 can be invested into a cash ISA is five thousand one hundred pounds. For savers whether new to investing or not, ISA’s are a strong and flexible form of saving and should not be discounted when looking at possible investments.
