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For people about to embark on the savings route, the
announcement from the UK’s 11 Downing Street that the yearly Individual Savings Account (ISA) allowance is to be increased from its present level of seven thousand two hundred pounds to ten thousand two hundred pounds is particularly welcome indeed and will probably tempt a considerable number of potential investors to create an ISA as the initial move in starting to invest for the future.

This very big increase in the maximum limit that people are able to invest annually is a clear indicator that the UK Government wants citizens to save using this form of investment.

For those not familiar with ISA’s (Individual Savings Accounts), a quick recap may be handy. 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 type of tax free saving.

No income tax is payable if you invest in an ISA. Add to that the fact that no capital gains are payable on an ISA and the benefits of this type of saving become even more apparent.

Anybody who is a payer of tax and who is over the age of sixteen can open an isa savings account and they can do so with as little an investment as ten pounds. This demonstrates a important point in the Governments thinking
behind the creation of ISA’s – they are intended to persuade more citizens who have never saved before to begin making provision for their future.

Another plus point for ISA’s is their flexibility. You can decide for yourself how you want to invest. There are various ways that are available when investing in an ISA ranging from cash ISA’s to stocks and shares ISA’s. You can just select the one that you feel to be right for your needs.

There are many who see investing in a cash ISA as a very secure type of investment because the returns are likely to be fixed and should be reliable. On the other side of the coin stocks and shares ISA’s are thought likely to yield more but the snag is that a much higher
level of risk attaches to this variety of investment.

Presently the maximum amount that you may invest into a mix of ISA investments is ten thousand and two hundred pounds and the maximum that may be invested into a cash ISA is five thousand one hundred pounds. For savers whether new to investing or not, ISA’s are an increasingly attractive and versatile type of saving and should not be discounted when choosing how to invest.