In each tax year individuals can invest money into Individual Savings Accounts (ISAs). For the 2017/18 tax year the maximum contribution into an ISA is £20,000. Money made in ISA’s grow free of income tax and capital gains tax, meaning ISAs have a clear advantage against many other types of savings vehicle.
ISA’s offer flexibility to save your ISA annual allowance of £20,000 in cash, stocks and shares or any combination of the two. Under the ISA rules you will also be able to transfer previous years’ ISA savings freely between stocks and shares and cash if you wish.
Savings into ISAs can be made as a lump sum, regular savings or both.
There are two types of ISAs -
Cash ISA -
Most Cash ISAs 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 whilst some providers are now offering Cash ISAs where the return is linked to the performance of various stock market indicies.
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 and tailored to their approach. Funds can invest in different asset classes such as Equities, Fixed Interest and Property and whilst some clients will opt to take bigger risks in the hope of getting larger gains, others will look for a more cautious or balanced approach.
At Phil Anderson Financial Services we can advise you accordingly.
Also available are Junior ISAs which effectively replaced Child Trust Funds (CTF), and were introduced in November 2011. Both cash and stocks and shares Junior ISAs are available. Up to £4,128 a year can be invested and this is significantly higher than the limit on CTF’s. Junior ISA’s 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 rolled into a tax free wrapper so to arrange an appointment to discuss further please contact Phil Anderson Financial Services.