Hond Financial

If you managed to make use of your Individual Savings Account (ISA) allowance in the last tax year, then you will be pleased to know that as of 6th April, you have another £7,200 of potential tax free investments in which you can deposit into ISAs.

If you didn’t manage to use up last years ISA allowance don’t worry, just deposit your savings into an account as soon as possible and benefit from tax free returns on your investment.

If you aren’t familiar with ISAs, it’s well worth checking them out, as you could be missing out on some great tax-free returns on savings and investments.

Savers are given a great opportunity to save at least £3,600 each year (also further possible £3,600 in investment ISAs) and pay no tax on any of the earnings. All individuals aged 16 and over can apply for an ISA, giving them the opportunity to invest upto £7,200 each tax year and earn tax free returns on their investment. The ISA allowance can be made up of either up to the full £7,200 in an investment ISA, or up to £3,600 in a cash ISA, and up to the remaining amount in an investment ISA.

Think of cash ISAs like a savings account, offering all of the features you would expect to see in a number of types of savings accounts, but with the difference being that you don’t have to pay any tax on the returns on your investment. It is common knowledge that with stocks and shares dealing comes risk, and there are no exceptions when it comes to investment ISAs, so you must be careful with where you plan to invest.

There are several different combinations of features that will differ from provider to provider, so it is up to you to choose the one that suits you best. You can choose whether you want to make a lump sum investment, or regular payments, and if you want your interest to added onto the total, or paid into a separate account.

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