New ISAs (NISAs)
NISAs are a very tax efficient form of savings. They allow you to invest in cash, bonds, shares and funds sheltered free from tax both on income and growth.
New Individual Savings Accounts (NISAs) are available to UK residents over 18 years of age or 16 years of age for Cash ISAs. All income and capital gains received from investments held within an ISA are completely tax free. For children up to age 18, you can invest in a Junior ISA up to £4,260 per child (2018/2019).
NISAs can be invested in cash or in stocks and shares (including unit trusts, investment trusts, OEICs, some fixed interest securities and any share quoted on a stock exchange recognised by HMRC.) From the 1st of July 2014 all ISAs became New ISAs (NISAs). This applied to all existing ISAs and new accounts opened after the 1st of July 2014.
The ISA limit has increased to £20,000 (2018/2019). You are able to split this amount between a Cash NISA and a Stocks and Shares NISA as you choose - up to the new overall annual NISA limit of £20,000. If you have sufficient savings you should normally use your full annual allowance every year.
Please note that any subscriptions you have made to an ISA since April 2018 will count towards the £20,000 NISA subscription limit for 2018/2019. If you have opened a Cash or Stocks and Shares ISA since April 6th 2018/2019, you are not able to open a further NISA of the same type during this tax year (up to and including the April 5th 2019). You can make additional payments up to the £20,000 NISA subscription limit to your existing account or you can transfer the account to another provider and then top up to your annual limit.
NISAs offer flexibility to save your NISA annual allowance in both cash and stocks and shares in any combination. Under the New ISA rules you are able to transfer your previous years' ISA savings freely between stocks and shares and cash if you wish.
Cash NISAs are widely available with different interest rates and it is a good idea to shop around for the best rates. It is important to fully understand the conditions attached to those rates as access may be restricted in order to achieve a higher rate of interest.
Stocks and Shares NISAs
Stock and Shares NISAs are also widely available and competitively priced. Many offer a fund supermarket arrangement whereby you can invest in the funds from many investment companies rather than being restricted to just one firm’s funds. Some also allow direct equity investments (shares) and access to professional discretionary fund management.
Help To Buy ISAs
Help to Buy ISA are available to qualifying first-time buyers. This government scheme is designed to help people save for a mortgage deposit with a 25% top up on contributions up to a limit of £12,000. So for every £200 saved, the government will contribute £50. Help to Buy ISA's are available to start saving up to 30th November 2019. Any Bonus must be claimed by 1st December 2030.
We can offer advice on which NISA is right for you.
WE RECOMMEND THAT YOU SEEK ADVICE WHEN TAKING OUT A NISA AND REMEMBER THAT THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN AS WELL AS UP AND YOU MAY NOT GET BACK THE ORIGINAL AMOUNT YOU INVESTED.
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