Independent financial advice - ISAs
Many people are now taking independent financial advice to choose the tax-free option, the ISA
What is an ISA?
With an ISA you can save up to £7,000 each year and not pay tax on the income you receive from your investment. An ISA can be made up of an investment in cash, or longer term investments like stocks and shares. In each year you can either invest in one Maxi ISA, which can include all of these types of investments, or you can have two Mini ISAs - one for cash and one for stocks and shares. Independent financial advice reports that you cannot invest in both a Mini ISA and a Maxi ISA in the same tax year.
Investment limits
There are two types of Mini ISA - a cash ISA, and a stocks and shares ISA. You can open each ISA with a different ISA manager if you prefer to. The amount you can invest in each tax year (6 April to 5 April ) is fixed. You can invest up to
- £3,000 in a cash ISA, and
- £4,000 in a stocks and shares ISA.
You cannot invest in more than one Mini cash ISA, or more than one Mini stocks and shares ISA in the same tax year. Take independent financial advice to see if an ISA is the best tax-free savings scheme for you.
A Maxi ISA can include both cash and stocks and shares. However, whichever way your investment is split, it counts as one Maxi ISA. So you can only open one Maxi ISA in each tax year. The total amount you can invest is £7,000 each tax year. You can invest up to £3,000 of this in cash.
How to choose an ISA
A wide variety of ISAs is available from banks, building societies and investment firms. Not all will offer all the different components, or combinations of components.
When choosing an ISA you should consider the following :
- How much can you afford to save or invest?
- How long can you afford to have your money tied up? If only for the short to medium term you might consider a cash ISA. If you can afford to have your money tied up for the medium to long term you could consider a stocks and shares ISA.
- What are the fees involved in the running of the ISA?
- What is the level of risk you are prepared to take?
Once you have decided what ISA you want and the amount you want to save or invest, taking into account the permitted investment levels, take independent financial advice to see which ISA will suit your pocket.
You can have a brighter financial future. If you would like independent financial advice about ISAs call our experienced advisers today on 0870 803 1995 or e-mail mike.robertson@mraltd.com
