Savings Accounts
A savings account offers many advantages
from regular bank accounts and building society accounts.
You can save up to £7,000 in the financial year.
You can invest lump sums or regular monthly amounts via
a direct debit. When Isas were first launched in 1999
the Chancellor proclaimed the allowance would fall to
the sum of £5,000. Now private investors are still
able to put up to £7,000 worth of stocks and shares
into a maxi Isa - £2,000 more than previously expected.
The mini Isa limit for stocks and shares
still remains at £3,000, as does the mini Isa limit
of £1,000 for insurance. However, savers wanting
to place their funds into a mini cash Isa will currently
be able to salt away £3,000 from April. The cash
limit was to have dropped to £1,000. Every resident
of the UK aged eighteen or above can buy an Isa and married
couples or partners can each have their own independently
of their partner. Joint accounts are not authorized.
Some independent financial advisers rebate
part of their commission to Isa investors, particularly
those who opt to hold unit trusts as part of their tax-free
investment.
If you are a serious investor with a well-balanced portfolio
and an interest in picking individual shares, then a self-select
Isa gives you the freedom to make your own choices. Self-select
Isas are either for people who want to hold high growth
or income stocks within a tax-free wrapper, or who want
to hold more than one collective fund within their £7,000
allowance.
They are popular among wealthy investors
and higher-rate taxpayers who want to shelter their gains
from capital gains tax as well as income tax. It means
you can switch easily between shares and trusts without
being tied to those provided by one manager. Most basic
rate taxpayers do not have the problem of capital gains
tax bills.
Self-select Isas can work out to be expensive
as the value of the underlying investments grows. As such,
they are not really for the beginner, who would be better
off constructing a low-risk diversified portfolio based
on a UK growth or index-tracker.
In addition, holding a handful of stocks
rather than a collective fund like an investment or unit
trust means that your Isa's fortunes rest on the performance
of a small number of shares. Nevertheless, if you are
a regular trader or have a knack of spotting growth shares,
this can be to your advantage. You can shelter all your
growth from capital gains tax if it is reinvested within
an Isa.
If you are also looking for a loan then we recommend
that you visit Loans
UK.
