What will be the Impact of the Recent Announcement from the UK about ISA Savings and the Implications for Consumers in the UK
For people about to embark on the savings road, the
announcement from Britain’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 extremely welcome indeed and may well persuade many potential investors to start an ISA as the initial step in starting to save for the future.
This major rise in the maximum limit that people are allowed to invest annually is a signal that the UK Parliament wants people to save using this means of investment.
For those not familiar with ISA’s (Individual Savings Accounts), a quick recap may be beneficial. ISA’s are now over ten years old and even before the announcement from Alistair Darling they had been considered by many as a secure and safe form of tax free saving.
A further benefit is that 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 perks of this type of saving become even more obvious.
Anybody who is a payer of tax and who is over the age of sixteen can get an isa savings account and they may do so with as low an investment as ten pounds. This illustrates a important point in the Governments thinking
behind the setting up of ISA’s – they are intended to tempt more people who have never saved before to begin making provision for times ahead.
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 investing in an ISA ranging from cash ISA’s to stocks and shares ISA’s. You can simply pick the one that you feel to be right for you.
A large number of savers see investing in a cash ISA as a really secure type of investment since the returns are likely to be fixed and should be reliable. On the other hand stocks and shares ISA’s are considered likely to yield more but the downside is that a far higher
level of risk attaches to this form of investment.
At the present time the maximum amount that you can invest into a mix of ISA investments is ten thousand and two hundred pounds and the maximum that may 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 versatile type of saving and should not be discounted when considering potential investment options.
