In the third quarter of 2017, UK households spent more than their incomes1, giving rise to another fall in the savings ratio, meaning that families may have no savings safety net they can rely on.
Everyone needs some money put away for emergencies and for the bigger, more exciting things in life like the deposit on a home, a child’s education or a wedding. It makes sense to have some cash that can be accessed quickly to pay for unexpected things like an unforeseen bill, and some that steadily builds up for the future. Once you have a rainy-day fund in place, you should seriously think about opening an ISA.
How ISAs can help
An ISA is a simple, tax-free way to save or invest. The advantage of these types of account is that you don’t pay tax on the interest or dividends you earn, or the increase in value of your investments. There are several different types of ISA available, designed by the government to encourage everyone to save or invest for their future.
What types of ISA are there?
The basic types are:
- Cash ISAs and stocks and shares ISAs for savers and investors
- Junior ISAs for children
- Help to Buy ISAs for those saving for a home
- Lifetime ISAs for those saving to buy a home or who wish to save until age 60.
The right savings strategy for you will depend on your personal circumstances. We can advise you on the best home for your short and longer-term savings, and explain the features and benefits of each type of account in a simple and straightforward way.
The value of investments and the income they produce can fall as well as rise. You may get back less than you invested. The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.
1The Office for National Statistics, 2018