I’ve got lots of coins, mummy. I’m rich – JD, 6 (looking at his piggy bank)
You may have seen whispers in the news that the Chancellor has announce the demise of ISAs – the savings account that allow you to save a set amount each year, income tax free.
Well, fear not! It’s actually pretty good news because from 1st July 2014, all ISAs won’t disappear, they’ll automatically become New ISAs or NISAs.
This video from Scottish Friendly explains everything.
So you see, switching to a NISA will actually mean you get a more flexible savings account and an increased yearly allowance.
There will be two types of new ISA:
- new cash ISA – a bank savings account where the interest is added tax free
- new investment ISA – allows you to invest in a range of investments in a tax efficient way
You can put your savings in one or both of these types of accounts up to a total of £15,000 – a limit set by the Government.
One of the things that makes some people nervous about savings commitments like this is that, of course, things can happen that change your life circumstances. With new ISAs, you’ll always be free to:
- switch your money between types of New ISA and even between providers
- change the amount you invest
- stop payments or restart payments
- take all or some of your money out whenever you want
- close your plan
That’s better flexibility than the old ISAs.
So, do you have an ISA, and if not, would you be keen to start one, now you know what the New ISAs are all about?
Let me know in the comments, and if you’d more help understanding your New ISA options, take a look at Scottish Friendly’s helpful guide.
Disclosure: this is a sponsored post. Image © Magnus D