In each tax year individuals can invest money into Individual Savings Accounts (ISA's). For the 2012/13 tax year the maximum contribution into an ISA is £11,280. Money made in ISA's grow free of income tax and capital gains tax, meaning ISA's have a clear advantage against many other types of savings vehicle.

Savings into ISA's can be made as a lump sum, regular savings or both.

There are two types of ISA - Cash ISA's and Stocks & Shares ISA's.

The maximum amount that can be invested into a Cash ISA in the 2012/13 tax year is £5,640. The maximum that can be invested in a Stocks & Shares ISA in any tax year is £11,280. If someone invests the full £5,640 into a Cash ISA then the maximum that they can invest into a Stcoks & Shares ISA in that tax year is £5,640. If you invest into both types of ISA you can choose a different provider for each ISA component. You can also select a different provider to those you have used for investing previous tax years allowances.

Cash ISA's -

Most Cash ISA's are usually offered by banks and building societies. Capital is usually guaranteed although returns can vary greatly between providers. Some offer fixed rate options and others offer variable rates. Some providers are now offering Cash ISA's where the return is linked to the performance of various stock market indicies. This type of Cash ISA usually has potential for higher returns although these usually have a mimimum term the money has to be left in.

Stocks & Shares ISA -

There are thousands of different funds available to Stocks & Shares ISA investors and we can help clients find the right fund(s) to meet their circumstances. Funds can invest in different asset classes such as Equities, Fixed Interest and Property. Some clients will opt to take bigger risks in the hope of getting larger gains while other will look for a more cautious or balanced approach.

Junior ISA's -

Junior ISAs are available from 1st November 2011. The accounts were announced in October last year and will effectively replace Child Trust Funds (CTF), which came to an end earlier this year. Both cash and stocks and shares Junior ISAs will be available. Up to £3,600 a year can be invested and this is significantly higher than the limit on CTF's. Junior ISA's will allow family and friends the opportunity to save in a tax-exempt way and this is a welcome boost for savers.

The Junior ISA is available for any child under age 18 who does not have a Child Trust Fund account. This covers those born before 1st September 2002 and children born after 2nd January 2011. The proceeds built up in a Junior ISA are not accessible until the child gets to the age of 18.

With the vast array of ISA options currently available to investors of all risk levels, from capital protected funds to offshore funds, there is something to suit everyone all roled into a tax free wrapper.

To arrange an appointment to discus ISA's please contact Phil Anderson Financial Services on 01358 268166.