With interest rates at a record low, it is often rare for savers to receive some good news. However, there is a light at the end of the tunnel. July marks the beginning of the new ISA (NISA), which means that the annual amount that can be saved into an ISA is now 30% more than last year, a total of £15,000. Furthermore, there is now no limit on how much that can be invested in cash within the £15,000 limit.
Previously, the total amount an individual could pay into a cash Isa in any tax year was £5,940. With the combined amount for a cash and stocks and shares ISA only reaching £11,880. From the 1st July, savers are now able to freely move their savings, with the ability to use the full £15,000 to invest in the stock market, cash or both. It is important to remember that any money saved into a NISA from the start of the new tax year, will be included within the new £15,000 limit.
Despite the added flexibility on contributions, there are still limits on the number of ISA accounts you can subscribe to each tax year. You can only put money into one cash ISA and one stocks and shares ISA in EACH TAX YEAR. But in different years, you could choose to save with different managers. There are no limits on the number of different ISAs you can hold over time.
Poor interest rates aside, the NISA offers a more generous tax-free saving vehicle for those approaching retirement. However, to help you make the most of your money, it is vital that you review your savings accounts on a regular basis to ensure that you are receiving the best returns.