October 8, 2009
A Brief Account of the Latest Statement from the British Government about ISA Savings and What it Will Mean for Savers in the United Kingdom
For people about to embark on the savings journey, the
statement from the UK’s Chancellor of the Exchequer that the yearly Individual Savings Account (ISA) allowance is to be upped from its present level of seven thousand two hundred pounds to ten thousand two hundred pounds is genuinely welcome indeed and may well persuade lots of potential investors to open an ISA as the first step in starting to invest for the future.
This major hike in the maximum limit that people are permitted to invest annually is a strong
signal that the British Government wants people to save more using this type of investment.
For those not familiar with ISA’s (Individual Savings Accounts), a short summary may be useful. ISA’s are now over ten years old and even before the news from the Chancellor they had been thought of by many as a secure and reliable variety of tax free saving.
For a start no income tax is payable when 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.
Any taxpayer.A taxpayer who is over the age of sixteen can open an isa savings account and they can do so with as low an investment as ten pounds. This shows a key point in the Governments thinking
behind the creation of ISA’s – they are intended to persuade more people who have never saved before to start making provision for the years ahead.
Another key point for ISA’s is their versatility. You can select how you wish 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 simply opt for the one that you feel to be right for your circumstances.
Most people see investing in a cash ISA as a really secure sort of investment as the returns are likely to be fixed and should be reliable. Conversely stocks and shares ISA’s are considered likely to yield more but the downside is that a much higher
level of risk attaches to this form of investment.
The situation now is that 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. For savers whether new to investing or not, ISA’s are a strong and versatile sort of saving and should not be overlooked when considering potential investment options.
