15:43 27 February 2013
Everyone is looking for ways to save more money. The economy is down, and unemployment is up. People are feeling insecure to say the least. Now more than ever, having a savings of some type is a necessity rather than a luxury. ISAs represent a great way to build your personal savings for the proverbial rainy day, and as a retirement savings shelter.
So what are the benefits of ISAs? Here are the 3 main reasons you should consider ISAs:
1.ISAs are tax free savings accounts, meaning that gains are non-taxable as long as funds remain in the account. They do, however, lose their non-taxable status once funds are withdrawn.
2.The total investment allowance has been increased for 2012 to 2013 to £11,280 from the original £7,000 when ISAs were first introduced in 1999. This means more non-taxable savings for U.K. residents.
3.There’s also a Junior ISA for kids 18 years old and younger with and allowance threshold of £3,000. This presents an incredible family savings option that the kids will be able to access once they reach the age of 18.
Here are some key details you need to remember about ISAs:
•You have the option to invest the entire amount into stocks and shares, but it’s important to remember that the increase or decrease of your capital gains will depend on the actual performance of those stocks and shares. So you could potentially lose your entire investment or make some awesome profits.
•If you want to play it a little safer, you can divide your investment and save £5,640 in cash and invest the remainder in stocks and shares.
•There are literally thousands of ISA funds you can invest in, and making the best choice takes some time and research, but it’s time well spent in the long run.
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