Alternative Investment

‘Pleasant surprise’: Savers urged to look at investing in ISAs as new tax year approaches | Personal Finance | Finance

Britons can pay in up to £20,000 into several ISAs during a tax year. With the capital gains tax allowance set to halve in April, many savers will be considering consolidating their savings into ISAs before the new tax year begins.

Uma Rajah, founder and CEO of investment firm CapitalRise urged Britons to look at the various ISA products on the market.

She told Express.co.uk: “It is worth keeping an eye out for new ISA products and providers. Many people aren’t aware that there are a range of different ISA products available nowadays with different risk and return profiles to suit different people’s risk appetites.

“From Cash ISAs which provide tax free savings with minimal or no risk (if you stay below the FSCS threshold which is currently £85,000) to Innovative Finance ISAs and Stocks and Shares ISAs, which are investment products and therefore naturally carry higher levels of risk and therefore correspondingly offer higher returns.

“The Innovative Finance ISA product is relatively new so not as well known as other ISA types but in our experience is growing fast.

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Explaining how the process works, Ms Rajah added: “An ISA transfer is a process that lets an individual move money they’ve built up in ISAs typically over previous tax years to a new provider and keep its tax-free benefits.

“There’s no limit to the number of ISAs a person can transfer between providers, and they can transfer them at any time.

“At CapitalRise, we have noticed an uptick in ISA transfers in recent months – but with ISA season now upon us and the new tax year not far away, that is to be expected.

“In November, the uptake of our Innovative Finance ISA offering from customers ‘transferring in ISAs’ from other providers tripled compared to our usual monthly average.”

The ISA transfer process allows a person to retain their tax-free allowance while moving previously invested ISA funds from one provider to another.

The previously invested ISA funds still have their tax-free status after the transfer process. Ms Rajah concluded: “Using the ISA transfer in process to move your historic ISA investments around, doesn’t affect your current tax year’s allowance, this remains untouched by the process.

“A person can transfer their ISA from one provider to another at any time, regardless of whether this is to the same or a different type of ISA.

“If they want to transfer money they’ve invested in an ISA during the current year, they must transfer all of it. For money they invested in previous years, they can choose to transfer all or part of it.”

The time it takes for an ISA transfer to be completed can vary but it usually takes up to 15 days for a Cash ISA transfer and around 30 days for an Innovative Finance ISA or Stocks and Shares ISA.

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