There’s still time to use your ISA allowance

Lockdown life may have left you with a bit of extra cash, if so, why not take the opportunity to make some tax-efficient savings and investments?

The end of the tax year (5 April) will soon be upon us, so if you would like to use some or all of this year’s ISA allowance, don’t leave it too late or you could miss out. Remember, you can’t carry over any unused allowance to the next tax year, so if you have cash you won’t need access to in the short term, then now’s the time to invest it.

The annual allowance for the 2020/21 tax year is £20,000 for an ISA and £9,000 for a JISA (Junior ISA). You can also mix and match within each of these forms of ISA, as long as the combined amount doesn’t exceed the relevant annual allowance; for example, you might choose to put half the money in a cash ISA and the remainder in a stocks and shares ISA. Or, you can put it all into one type of account.

With interest rates currently at rock bottom, it’s more important than ever to ensure your savings are working hard for you. The ability to save up to £20,000 tax-free is one way of achieving a higher return, especially for those in higher or additional rate tax bands, who don’t benefit fully or at all from the Personal Savings Allowance. With many after-school kids’ clubs off the agenda, why not invest the average spend of £57.36 per week, totalling almost £2,200 over the course of a 38-week school year, into a JISA? It all adds up.

5 April is Easter Monday this year, so don’t wait until the last minute

It is important to take professional advice before making any decision relating to your personal finances. Information within this page is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.

Tax and Estate planning are not regulated by the Financial Conduct Authority

The value of pensions and investments can fall as well as rise. You may get back less than you invested.

Will writing is not regulated by the Financial Conduct Authority. 

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