Welcome Boost to ISAs - 2009-10-06



This year’s Budget announced changes and improvements to ISAs. Primarily, the personal ISA allowance rises from £7,200 to £10,200 (of which up to £5,100 can be invested in a Cash ISA if required). For the over-50s, these increases came into force on 6th October this year. Persons under-50 will be able to use the higher allowances in the next tax year (from 6th April 2010).

These increases are welcome for savers as it will mean more savings and investments can be held in a tax-efficient manner. The changes have caused many people to review their own ISA arrangements and below we summarise some key points to consider which could help boost your savings further…

Keep cash under review

Cash ISAs have been in existence for many years now and it is quite possible that you may have built up substantial amounts of cash held in these tax-efficient vehicles. However are you aware what rate of interest your savings are receiving? It is quite possible that what was once a high interest rate has fallen to very low levels due to falling interest rates and the loss of introductory bonus deals offered by banks or building societies.

Cash ISAs can quite easily be transferred between providers without losing the tax advantages and currently fixed rate ISAs are offering interest rates of between 3.25% (fixed for 1 year) or up to 4.6% (fixed for 5 years) – source Moneyfacts 1/11/09.

Turn your cash into gold? (or shares / bonds etc..)

Whilst the personal cash ISA limit is rising to £5,100, this does not have to be used and the full £10,200 allowance could be used for “investments”. Typically this would take the form of investment in a fund or funds that hold a variety of shares, corporate bonds, property, gold and other investments.

Not only can new monies be put into investment ISAs, but the regulations now allow that monies held in existing Cash ISAs can now be transferred into Investment ISAs, again without losing the tax-efficient status.

This is very attractive to clients wishing to take a little more risk with some of their ISA savings in order to benefit from the potential of higher returns that Investment ISAs can offer. Of course, we would suggest that you speak to an adviser before taking this action in order to discuss the implications, particularly as Investment ISAs should be viewed as long-term investments and can not be converted back to Cash ISAs. We will be happy to discuss your options with you, so please contact us to find out more.

Investment ISAs – how is yours performing?

There are well over 2,000 different ISA qualifying investment funds in the UK to choose from and as you can imagine some are better than others! The performance of funds varies over time as fund managers come and go and the economy changes. It is important therefore to review your investments regularly to ensure that they have the best opportunity to perform and deliver decent returns to you.

Here at Stan Gaskin Ltd we use well-established funds with good track records and regularly monitor the performance of all funds to ensure clients monies are still being managed well. We have state of the art technology to analyse all investment funds and use and share this research and analysis with our clients.

Let us help you review your ISAs

Using our independent status and our research tools we offer reviews of clients’ ISA arrangements as part of our ongoing service. If you have investment or cash ISAs that you wish us to help you to review then please contact an adviser and we will be glad to help.