‘Cash and shares mix’
Statistics have shown that roughly half of the UK adult population have an Individuals Savings Accounts (ISA). The most popular area for these accounts being in the South West of England (50.9%).
Within these findings it was also shown that London had the smallest percentage of people with an ISA at 42.5%. The numbers are also said to be increasing with age.
Since 6 April, £11,880 was the maximum amount that could be put into the tax-free account; during the tax year, with only half of this can be cash.
However, due to the changes in ISA regulations, the allowances can now be held in cash, stocks and shares, or any combination of both.
Any money that is held in stocks and shares ISAs opened during the tax year can be transferred into cash NISA; however, whether or not partial transfers will be allowed depends on the provider.
“We want to support savers at all stages of their life and make sure they have greater flexibility and choice over how they access their savings,” said Chancellor George Osborne.
‘Low rates’
The changes in the regulations also mean:
Rachel Springhall, spokeswomen for financial information service Moneyfacts, said that since March, the rates on one-year fixed-rate ISAs had fallen from 1.58% to 1.48% and that the typical rate on a variable cash ISA had fallen from 1.26% to 1.21%.
“The falls in rates will likely cause much disappointment for savers who did not see a fruitful ISA season this year and have pinned hopes on the new deals so they can boost their income.” She said.
The British Bankers Association (BBA) has stated that the change was what members were ready for.
“The BBA has been holding weekly calls with our members, fund managers, and other providers to prepare for these changes,” said a BBA spokesman.
“Staff have received specific training and banks have put plans in place to make sure they are ready if there is a surge of customers wanting to move from stocks and shares products into cash or vice versa.”
Why open an ISA?
The interest on money in a cash ISA is tax-free and you do not have to put it on your Self Assessment Tax Return.
If do you need further advice on completing your Self Assessment tax return Foremans can help. Contact us on 01244 625 500.