Increasing Levels of Saving after the Latest Statement from the UK about ISA Savings and the Implications for the Finance Sector in the UK
For anyone considering starting out on the savings route, the
announcement from Britain’s Chancellor of the Exchequer 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 may well persuade lots of prospective investors to create an ISA as the initial step in beginning to save for the future.
This significant increase in the maximum limit that savers are permitted to invest annually is a clear sign that the British Government wants everyone 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 news from the Chancellor they had been considered by many as a stable and reliable type of tax free saving.
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 form of saving become even more obvious.
Anybody who is a payer of tax and who is over the age of sixteen can begin an isa savings account and they may do so with as low an investment as ten pounds. This demonstrates a important point in the Governments thinking
behind the creation of ISA’s – they are intended to tempt more citizens who have never saved before to begin making provision for the future.
Another important point for ISA’s is their flexibility. You can decide for yourself how you wish to invest. There are varied ways that are available when saving in an ISA ranging from cash ISA’s to stocks and shares ISA’s. You can just opt for the one that you consider to be right for your needs.
Most people see investing in a cash ISA as a more secure type of investment because 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 drawback is that a far higher
level of risk attaches to this type of investment.
Presently the maximum amount that you may invest into a combination 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 consumers whether new to investing or not, ISA’s are a very attractive and versatile type of saving and should not be dismissed when looking at possible investments.
