For people about to embark on the savings road, the statement from the UK's Chancellor of the Exchequer that the annual Individual Savings Account (ISA) allowance is to be upped from its current level of seven thousand two hundred pounds to ten thousand two hundred pounds is very welcome indeed and may well prompt a significant amount of potential investors to start an ISA as the first step in beginning to save for the future. This big increase in the maximum limit that savers are allowed to invest annually is a powerful sign that the Government wants everyone to save using this means of investment.
For those not familiar with ISA's (Individual Savings Accounts), a brief recap may be of interest. ISA's are now over ten years old and even before the news from the Chancellor they had been thought of by many as a secure and reliable form of tax free saving. For anyone investigating investment options the ISA is now sure to be an even more attractive prospect. Since they were introduced in 1999, the advantages that are on offer with Individual Savings Accounts have been extremely tempting. No income tax is payable when you invest in an ISA. Add to that the fact that no capital gains are payable on an ISA and the advantages of this means of saving become even more obvious. You will discover that ISA's are available from a wide range of sources, some of which are on the internet while others can be found on the high street. These types of investments are at the safest end of the spectrum - they are relatively straightforward too.
Anybody who is a payer of tax and who is over the age of sixteen can get an isa savings account and they may do so with as little an investment as ten pounds. This illustrates a central point in the Governments thinking behind the creation of ISA's - they are intended to encourage more people who have never saved before to start making provision for the future. Another plus point for ISA's is their versatility. You can select how you want to invest. There are varied ways that are available when investing in an ISA ranging from cash ISA's to stocks and shares ISA's. You can simply choose the one that you feel to be right for you. Many people see investing in a cash ISA as a more secure type of investment as the returns are likely to be fixed and should be reliable. On the other hand stocks and shares ISA's are considered likely to yield more but the snag is that a much higher element of risk attaches to this type of investment.
As the volatility of the stock market has illustrated over recent times any investment in stocks and shares carries with it a degree of risk and so the potential tax free returns are a lot less reliable. At the present time the maximum amount that you can invest into a combination of ISA investments is ten thousand and two hundred pounds and the maximum that can be invested into a cash ISA is five thousand one hundred pounds. For consumers whether new to investing or not, ISA's are an increasingly attractive and versatile sort of saving and should not be overlooked when choosing how to invest.
