A new phase for ISAs

Individual Savings Accounts (ISAs) entered a new phase from 1st July 2014. Previously, ISA contributions for the 2014/15 tax year were capped at £11,880. The entire amount could be invested in a stocks & shares ISA, or up to £5,940 could be saved into a Cash ISA. From 1st July 2014 however, the ‘New ISA’ (NISA) limit increased to £15,000 with the ability to invest as much as you like of this allowance in cash, stocks & shares or a combination of the two. Investors can also transfer ISA savings from previous years freely between stocks & shares and cash.

Any ISA subscription made between 6 April and 30 June 2014 will be counted against the £15,000 NISA subscription and investors are therefore unable to open up a new stocks & shares NISA for the current tax year from 1 July. Instead, you will have to top up the existing account. Do check with your provider’s terms and conditions – particularly if you have already opened a fixed-rate cash ISA.

The range of investments that can be held within a NISA is also expanding and this is likely to lead to an increase in new products from providers that, in turn, will provide greater choice for savers. One thing has not changed however – once it’s gone, it’s gone. At the end of each tax year, you lose any unused ISA allowance, so make sure you act in good time each tax year and, if you are unsure about anything, please speak to us.