A Few Thoughts on the Recent Statement from the Government about ISA Savings and What it Will Mean for the Finance Sector in the United Kingdom
For anyone considering starting out on the savings route, the
announcement from the UK’s 11 Downing Street that the yearly Individual Savings Account (ISA) allowance is to be moved from its present level of seven thousand two hundred pounds to ten thousand two hundred pounds is truly welcome indeed and will probably persuade a lot of prospective consumers to create an ISA as the first move in commencing to save for the future.
This significant increase in the maximum limit that people are allowed to invest annually is a powerful signal.clear signal that the Government of the UK wants everyone to save using this type of investment.
For those not familiar with ISA’s (Individual Savings Accounts), a quick recap may be handy. ISA’s are now over ten years old and even before the news from Alistair Darling they had been considered by many as a secure and safe form of tax free saving.
No income tax is payable if you invest in an ISA. Add to that the fact that no capital gains are payable on an ISA and the attractions of this form of saving become even more apparent.
Anybody who is a payer of tax and who is over the age of sixteen can open an isa savings account and they can do so with as small an investment as ten pounds. This shows a central point in the Governments thinking
behind the creation of ISA’s - they are intended to persuade more citizens who have never saved before to start making provision for their future.
Another key point for ISA’s is their flexibility. You can pick and choose how you want to invest. There are different ways that are available when saving in an ISA ranging from cash ISA’s to stocks and shares ISA’s. You can just pick the one that you feel to be right for your needs.
A large number of savers see investing in a cash ISA as a more secure type of investment since 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 downside is that a much higher
element of risk attaches to this form of investment.
Presently the maximum amount that you may 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 very attractive and flexible type of saving and should not be discounted when looking at possible investments.
