This article is for information only and no recommendation is being made or should be construed from the contents of the article. Always seek independent financial advice prior to taking any action.
After each Budget announcement, it would seem that it is getting harder and harder for investors to find ways of saving and investing tax-efficiently. Just recently the pension’s lifetime allowance, which was at one point as high as £1.8m, fell to £1m, and the pension’s annual allowance has now been scaled back to £40,000, or, for some higher earners, even is as low as £10,000.
So what can you do? One suggestion would be to maximise on the ISA – or the annual individual savings accounts.
Over the past decade the ISA allowance has been slowly increasing and is now at the current level of £15,240. And don’t forget that if you are part of a couple and you personally have used up your annual ISA allowance, you could also transfer some assets to your partner so they can make use of their allowance which will give £40,000 of tax-efficient investing between you.
But be aware, you must do this before the end of the financial year, which is 5th April 2017, otherwise you will forfeit any unused allowance – investments cannot be backdated. With only just over a week left, there is no time to lose.
What ISA can I invest in?
There are two main types of ISAs – Cash and Stocks & Shares. You can choose how you split your allowance between the two. Although currently, with interest rates on cash ISAs being very low, the Stocks and Shares ISAs could be a better option as over the past year, the FTSE 100 has increased by more than 21%, and whilst past performance is no guarantee of future growth, Stocks and Shares ISAs look like a significantly better proposition for the year ahead.
How to invest in an ISA?
To make the most of your investments, you can set up your ISA through our new online investment service. This will minimise your fees as there are no upfront broker costs –you can do this from the comfort of your own home and have complete control of your investments.
From registration, our service will take you through a brief risk analysis so that we can provide the ideal recommendations to suit your requirements and expectations. You can then modify your investment selections until you are happy – the whole process is simple and efficient.
Have a look at our new service on our website. If you do have any questions on ISAs or any other investments you can call one of advisors on 01892 300303.