Archived article: This article was correct at the time of publishing. Tax, investments and pension rules can change over time so the information below may not be current.

Financial Planning

ISAs – bigger and better than ever

One of the highlights of the 2017/18 tax year was the increase to the annual ISA limit. While pension allowances have been significantly reduced in recent years, the annual ISA allowance has gradually increased from £7,000 in 1999 to £20,000 – that’s £40,000 per couple. Unlike pensions, there is no limit to how much money you can hold in an ISA either. ISAs have many other benefits that make them a really useful and important investment account for people of all ages.

The advantages of ISAs

  • ISAs have great tax benefits. The interest you make on cash savings or the gains from investments within an ISA are free from Income Tax and Capital Gains Tax
  • You have easy and immediate access to your money. This is particularly useful if you are under the age of 55 and cannot access your pension
  • Unlike a pension, there is no limit to how much you can hold within an ISA

ISA growth in action

The best way to see the benefit of ISAs is to look at how much money you could have made if you’d invested the full allowance every year since ISAs were first made available in April 1999. Over 18 years you would have invested a total of £186,560 tax-free, and this would have grown by £191,954.54 to give you a total of £288,505.54 (assuming 5% annual growth)*.

You could have £288,000 if you’d invested the full ISA allowance each year and achieved 5% annual growth.

How a financial planner can help

It’s clear that the benefits of investing in an ISA are immense. At Tilney, our financial planners are here to help you make the most of your ISAs, plus all other tax allowances available to you. They will:

  • Make sure you’re using all of your available allowances
  • Discuss the best way for you to fund your ISA
  • Check that you are saving enough into your ISA and any other investment accounts to fund your financial goals
  • Explain how ISAs can play an important part in retirement planning

Download our guide to tax-efficient investing to find out more about ISAs, your other tax allowances and how our experts can help you make the most of them.

 

Speak to an expert

If you have any questions about ISAs and how they could benefit you, please speak to your financial planner. If you don’t have a financial planner, you can book an initial financial planning consultation online or by calling 020 7189 2400 or emailing contact@tilney.co.uk. We can meet you at your home, workplace or local Tilney office, or we can speak over the phone.

Important information

*This figure is based on an investment return of 5% per annum, exclusive of any fees (which may vary from provider to provider), compounded annually. This level of return is not guaranteed. You should note that investments can go down as well as up and it is possible to get back less than you originally invested. The way in which tax charges and tax relief are applied depends on individual circumstances and may be subject to change in the future.

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