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Independent financial advice - ISAs

Many people are now taking independent financial advice to choose the tax-free option, the ISA

What is an ISA?

In an ISA you can save up to £7,200 each year and not pay tax on the income you receive from your investment. That figure will increase to £10,600 on April 6 2010. Those born before April 6 1960 already benefit from the higher amount. An ISA can be made up of an investment in cash, or longer term investments like stocks and shares. In each year you can invest up to half (£5100) of your available contributions into cash ISA investments.

The big selling point for ISAs, of course, is their tax status. As you may know, any gains within the ISA are free of both capital gains and income tax. You can now transfer part or all of your previous tax years’ Cash ISA to a stocks and shares ISA. This gives you the opportunity to review your ISA investments and make changes to better suit your investment goals.

Investment limits

There are two types of 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

  • £3,600 in a cash ISA, and
  • £7,200 in a stocks and shares ISA.
  • (Increasing to £5,100 and £10,200 as of April 6 2010)

Take independent financial advice to see if an ISA is the best tax-free savings scheme for you.

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 01424 777 156 or use our Online Contact Form.