The end of the tax year is almost here, but there’s still time to make the most of your annual tax-free allowance.
The 2018/19 tax year will be the 20th year the individual savings account (Isa) has been available. But there is plenty of life in the old dog yet, and still time to make use of some or all of your Isa allowance for the 2017/18 tax year.
While high interest current accounts and other savings products have taken some of the lustre away from Cash Isas, they, and their investment Isa cousins, remain a hugely popular way to save or invest.
The key attraction of Isas is that every penny held within the account is not liable for tax on savings or investment growth. While the introduction of the personal savings allowance has taken away some of the advantages of a Cash Isa (page 5), there are still reasons to keep your money housed in this tax-free wrapper.
Many people also have several years’ allowances already saved in Isas. Data from HMRC shows that 11.1 million adult Isa accounts were subscribed to in the 2016-17 tax year, with the total cash held in adult accounts standing at £585 billion.
However, much of this money is left in accounts offering a poor rate of interest. By transferring your Isa to a new provider, you could be earning much more on your tax-free savings.
There are more types of Isa on the market than ever before. The classic Cash Isas and Stocks and Shares Isas have been joined in recent years by several new Isas, all designed to help you save or invest tax free.
In this guide, we will look at how the Help to Buy Isa and Lifetime Isa can help you save towards your first home (page 8), plus the options available for investing in the stock market and in the peer-to-peer sector (page 10).
Finally, you can find out how to start a nest egg for your kids with a Junior Isa in our guide on page 15. To get the full guide, head to the nearest WH Smiths or other newsagents to pick up a copy of Moneywise. Alternatively you can buy a copy online of the latest edition of Moneywise which contains the Easy Isa Guide 2018.
However, the most important thing to remember with Isas is that if you don’t use it, you lose it. Your annual allowance resets on 6 April, whether you’ve maxed out your allowance or not.
Your £20,000 adult Isa allowance for the 2017/18 tax year runs out on 5 April 2018, so read on to find out how you can take advantage before the new tax year starts.
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