The New ISA Limits Are Here – And Here’s How to Use Them to Your Advantage

Saving has been a hot button topic around the country for a long time. Just how do you save when wages are falling and the cost of living is rising? HMRC announced in March that the ISA limits were changing. Now that we’ve had a few months to see what’s going on, there are some facts that you need to know in order to truly make the best decision around.

By now, you should have topped off your ISAs for the previous tax year. But as July 1st approaches, a new ISA limit approaches with it. From here on out, you can put away 15,000 GBP between cash ISA and a stocks and shares ISA. But the new ISA — called the Nisa, brings some flexibility that will make things a lot easier over time. We say “over time” for one big reason: these changes are rolling through in a very slow fashion. Some providers will act faster than others, and transfers may be slower than you would like. Be patient and let the system work itself out. This will be a net positive in the long run, from what we’ve seen so far.

Youth Encouraged to Save

One of the biggest trends that are emerging from the new wave of changes is that youth aged 16 to 18 are being encouraged to save. It’s been shown time and time again that the younger you are when you really start saving money, the more money that you will have over time. The power of compound interest is a proven fact, so we won’t belabor the point here.

New ISA Limits

People in this category get to put away 15,000 GBP into a cash ISA, but they also get to set aside 4,000 GBP in the new Junior ISA account, or “Jisa”. This is an incredibly opportunity to save more than the average person does, and hopefully young people will take advantage of it.

Transfers Allowed…To Cash Only

If you have money in a stocks and shares ISA, you can move it to a cash ISA. You want to make absolutely sure that you’re moving it to a cash ISA that allows for transfers in, otherwise you will not be able to do it.

No Peer to Peer Loans in S&S ISAs… For Now

Peer to peer loans are exploding in popularity across the UK, but that doesn’t mean that you can include them in your S&S ISA. It’s not the best news, but HMRC has promised to review the regulations and assorted issues surrounded these loans and make a ruling in the future. [Read more…]