For those looking for a chance to set off on the savings journey, the
statement from the UK’s Chancellor that the yearly Individual Savings Account (ISA) allowance is to be increased 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 potential investors to open an ISA as the first step in beginning to invest for the future.
This substantial increase in the maximum limit that people are able to invest annually is a clear sign that the UK Government wants citizens to save more using this type of investment.
For those not familiar with ISA’s (Individual Savings Accounts), a quick summary may be of interest. ISA’s are now over ten years old and even before the statement from the Chancellor they had been regarded by many as a secure and reliable form of tax free saving. For anyone looking at investment options the ISA is sure to be an even more attractive proposition. Since being introduced in 1999, the benefits that are on offer with Individual Savings Accounts have been pretty alluring.
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 benefits of this means of saving become even more attractive. You will discover that ISA’s are available from an extensive variety of sources, some of which are on the internet while others can be found on the high street.
Another plus point for ISA’s is their flexibility. You can select how you want to invest. There are varied ways that are available when investing in an ISA ranging from cash ISA’s to stocks and shares ISA’s. You simply select the one that you think to be right for your circumstances.
A lot of people see investing in a cash ISA as a very secure type of investment since the returns are likely to be fixed and should be reliable. Conversely stocks and shares ISA’s are thought likely to yield more but the downside is that a much higher
level of risk attaches to this type of investment.
The maximum amount that you may invest into a combination 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.
Finally,you may wish to investigate other investment alternatives such as the child trust fund. For those interested in insurance matters you should look into life cover. Tax free savings are other options to consider.
