It is worth bearing in mind that a stocks and shares ISA is a medium to long-term investment, and that the value of your investment can go up or down.
ISA’s are an easy way to earn more interest on your savings, without having to pay any tax. However each year the amount you can invest into an ISA changes. The ISA allowance runs each year from the 6th of April until the 5th of April. For the 2012/13 tax year the total annual ISA allowance is £11,280 of which £5,640 can be saved in a Cash ISA.
This cut off date for investing in an ISA is non-negotiable, if you do not invest in this time frame then you will not be able to roll your investment. Also if you draw on any of your ISA investment, then you will not be able to pay it back in, so for example if you pay £3,500 into your ISA and then draw it out then you will only be able to add an extra £2,140 for the rest of the tax year. There is no limit to the amount of ISA’s you can have, so if you wanted to open a new one every year this would be possible, but you can only have one Cash ISA and one investment ISA each year.
It is also possible to transfer both your current year’s ISAs and previous tax years ISAs from one provider to another, so ensure that your savings remain profitable. If you take out more than one ISA per tax year, then the second will not be eligible for tax relief.
If you would like more information about how to invest into an ISA, or if you would like to get more out of your ISA, then call one of our team, we are Independent Financial Advisors, so we will be able to get you the best deal from across the market place.
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