Have you used your ISA allowance this year?
Individual Savings Accounts traditionally shortened to ISAs are simply cash or investment accounts allowing you to save tax-free. Every adult can save up to £20,000 in the current tax year and the amounts of tax-free allowance is reviewed annually and published by the government.
There are many types of ISAs available in the UK - Cash, Stocks and Shares, Innovative Finance (not  covered by the FSCS),  Help to Buy, Lifetime Cash, Lifetime Stocks and Shares, Junior Cash and Junior Stocks and Shares. Each of them have different features, maximum allowances and use or age restrictions.
The two most popular ISA accounts are firstly Cash ISAs which are just like traditional saving accounts, except that there are limits on how much you can deposit each year to take advantage of the tax-free interest accumulation. Yes, you are right, those types of accounts will not see much gain this year, but equally will provide you with the safety of old-fashioned deposits.
And secondly, Stocks and Shares ISA’s which provide more opportunities for growth, due to the underlying investments they use to generate returns. Stocks and Shares ISAs are an investment account and depending on your personal attitude to risk can be invested in various markets and solutions. It is true however, that  you will risk getting back less then you put in.
Remember you have only 5 weeks left in the 2020-2021 tax year to take advantage of your ISA allowance. It is important to understand that financial institutions are experiencing processing delays due to Covid enforced working arrangements and may take longer than usual to process your application. So, don’t try and leave it till the last week of March!
If you need help in choosing the best option for your ISA or if you are interested in ethical, sustainable or environmentally friendly investing, get in touch with Haverfords via the contact details below.
01733 308666
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