A specialist accounting and tax firm has urged savers of all ages to consider setting up a tax-free Individual Savings Account (ISA) in order to reap the benefits of lucrative tax-free savings.
The amount that savers are allowed to put in their ISA’s on a tax-free basis recently rose to £20,000 for the 2017/2018 year, an increase on the allowance of £15,240 for the previous year.
Mr. Aatif Malik from The Accountancy Solutions said: “With the ISA limit rising to £20,000 in April, 2017 is the best year yet to invest in a tax-free ISA account which can save individuals thousands in cash.
“ISA’s are a fantastic option for people of all ages; whether it’s young people looking to put away cash for their homes through the Help-to-Buy ISA, Lifetime ISAs for savers aged under 40 or Junior ISA’s for those under 18.”
There are currently six different ISA types available in the UK. Cash ISAs are the simplest, with cash being held in a bank or building society tax-free. Stock and shares ISAs allow individuals to hold tax-free investments, while innovative finance ISAs allow owners to lend out cash to peers or friends and earn interest free of income tax.
Junior ISAs are tax free savings accounts for children with a tax-free investment limit of £4,128 for 2017, and a lifetime ISA can be opened by anyone under the age of 40. The bonus of a Lifetime ISA variant is that the owner can save up to £4,000 a year with a yearly government bonus of 25% added to the total. Help to Buy ISAs work similarly, allowing savers looking to afford a home a 25% government-funded top-up on their savings provided they save at least £1,600.
ISA usage has ballooned over recent years, with HMRC figures showing that a record £80bn was invested in the tax-free cash or investment accounts in 2015.
While some UK savers invest their ISA savings directly into stocks and shares, the majority of ISA holders in Britain tend to opt for cash ISAs. There was a massive £58.7bn invested in cash ISAs last year compared to £21.4bn in stock ISAs.
Mr. Malik said: “We’re not surprised at the massive surge in people utilizing ISAs over recent years. The collection of ISA variants makes them a fantastic choice for virtually anyone.
“I’d urge anyone thinking of opening an ISA account to come to us for unrivalled financial advice on what the best ISA option for them is and how to make the most out of it.”
The Accountancy Solutions is a Birmingham and London-based accountancy firm that offers comprehensive, expert advice on a broad range of tax and accountancy-related issues, from HMRC investigations and retirement planning to financial accounting and business forecasting.
For more information about the range of other tax and accountancy services offered by The Accountancy Solutions, please visit https://theaccountancysolutions.com/ or call 01216297768 (Birmingham) or 02070784001 (London).