Reflections on the Latest News from the Chancellor about ISA Savings and the Effects it Will Have on Investors in Britain
For people about to embark on the savings path, the
statement from Britain’s Chancellor that the annual Individual Savings Account (ISA) allowance is to be upped from its present level of seven thousand two hundred pounds to ten thousand two hundred pounds is highly welcome indeed and will probably tempt a lot of prospective investors to open an ISA as the initial move in beginning to invest for the future.
This hefty increase in the maximum limit that people are able to invest annually is a clear indicator that the British Government wants everyone to save using this form of investment.
For those not familiar with ISA’s (Individual Savings Accounts), a short recap may be beneficial. ISA’s are now over ten years old and even before the statement from Alistair Darling they had been regarded by many as a secure and safe type of tax free saving.
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 benefits of this means 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 can do so with as little an investment as ten pounds. This shows a important point in the Governments thinking
behind the creation of ISA’s – they are intended to persuade more people who have never saved before to begin making provision for times ahead.
Another plus point for ISA’s is their flexibility. You can select how you want to invest. There are different ways that are available when investing 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 your circumstances.
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
element of risk attaches to this sort of investment.
The situation now is that 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 versatile sort of saving and should not be overlooked when looking at possible investments.
