The latest way to save: New ISAs
The beginning of July saw the launch of the New ISAs, part of the government's mission to encourage the UK to save!
Until now, ISAs have been a great option for savers with fairly small cash amounts, as the interest earned is not taxable. There have been restrictions on the total amount saveable as well as only being able to save half of the allowance in cash, whilst the full amount could be invested in stocks and shares ISAs if you wished.
The NISA's not only offer more flexibility but they have increased the annual allowance that can be invested. Under the new legislation, savers can now save up to £15,000 in stocks and shares ISAs, cash ISAs or a combination of the two! This applies to all existing ISAs and new accounts opened after 1 July. Savers will also be able to transfer previous years’ savings freely between the two.
Whilst these changes vastly improve savings possibilities for many, the interest rates on the NISAs are not to be bragged about. Typically you will find instant access ISAs paying around 1.55% and fixed or limited access ISAs at 2.85%. Stocks and shares ISAs can provide much bigger returns depending on the investment, but of course, this can be a much riskier option for saving money.
Do you need some advice on how you can save most efficiently? Call us on 020 8545 7600 to speak to one of our tax specialists.