People who have individual savings accounts (ISAs) should capitalise on tax-free savings by putting the entire allowance in at the beginning of the tax year to gain the most amount of interest (ISA Investment)
Last month, the Chancellor of the Exchequer George Osborne published the government’s Budget for 2016-17, in which it was revealed that the ISA limit would remain the same as last year at £15,240.
However, from April 2017, this will increase to £20,000, whether the money is invested in stocks and shares, peer-to-peer investments, a cash ISA, or split between the three.
One way to really make the most of this tax-free allowance is to place the entire £15,240 in the account straight away, for those who have the funds available.
This will mean they can earn as much interest as possible for the following 12 months.
Investment research manager at The Share Centre Sheridan Adams agrees, saying investing all your money at the beginning of the tax-year provides “increased opportunity for growth”.
He also emphasised stocks and shares ISAs as offering more potential for a higher return for investors, despite the element of risk involved.
Indeed, Hargreaves Lansdown’s Danny Cox supports these statements, saying: “Over the long term, a stock market investment is likely to provide a better return.”
However, savers may find other accounts provide better rates of interest, in which case it could be prudent to put money aside in alternative places to accrue as much profit as possible.
This is especially the case as of April 6th, as lower-rate taxpayers no longer have to pay a levy on the first £1,000 interest they receive in a non-ISA account, with this reducing to £500 for higher-rate taxpayers.
If you would like to speak with one of our Independent Financial Advisors and potentially receive financial advice, please contact us on 0117 923 7652. We are based in Clifton, Bristol but we are happy to service clients from across the UK and we provide free initial meetings at our client’s convenience.
Churchill Wealth Management Limited is located at 13 Alma Vale Rd, Bristol BS8 2HL, United Kingdom.
About Us: Churchill Wealth Management is a team of independent financial advisors/financial advisers (IFAs) based in Clifton, Bristol. We provide independent financial advice, including pension advice, investment advice, inheritance tax planning and protection/insurance advice.