Why Now Is The Best Time To Review ISA Accounts

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Why Now Is The Best Time To Review ISA Accounts

Posted On : Mar-29-2011 | seen (2080) times | Article Word Count : 1010 |

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Are you sure that your investments are in the most profitable place possible? Do you know which are the best ISAs for you and your money? Do you realise that new legislation has changed, and will continue to change, the amount of money you can invest annually in your chosen ISA accounts? If you are unsure about any of these matters, then now is the time to act to shore up your investments and ensure they are performing for you as strongly as possible.

It is tempting to think that when you first considered taking out an ISA to invest in, the hard work was complete. No doubt, many investors wisely chose to compare ISAs to see what the best options available were. Many will have opted to choose a cash ISA that offers a higher rate of interest but perhaps less accessibility to the funds. Some will have chosen a cash ISA that offers a lower rate of interest, but the ability to access the funds quickly. Other investors may have chosen to invest in the stock and shares ISA, assessing the risk of such an investment over the likelihood of seeing a decent return on their investment.

In recent years however, the rules governing how much can be invested in each type of ISA each year has changed, which has meant that many investors need to review how much they are paying into their ISA to ensure they are getting the best possible return from their money.

For cash ISA accounts, the amount you could invest remained at £3,000 per annum, from 1999, up to 2008. In 2009, however, that limit was increased to £3,600 for the next two years before the government announced that for the current financial year of 2010-11, the limit would rise considerably to £5,100.

For those with stocks and shares ISAs, the rise has been equally sharp. From £7,000 a year being the limit in 2008, to the increased limit of £7,200 in 2008-09, before being set at £10,200 for the current financial year.

It is therefore imperative for those who continue to invest in their ISAs annually that they are made fully aware of the changes to the limits of investment in each type of ISA, which translated means that they can invest more into the ISA and seek a greater return on their money.

The reason why now is the best time to do this is twofold. The first is to do with an anomaly in the English calendar and the second is to do with potential future increases to the investment limit for ISAs in subsequent years.

First of all, it is widely recognised by financial institutions and experts that many people tend to leave their ISA investment to the last minute. There may be many reasons for this; some people like to have capital available for them to use rather than locked away in an ISA, or some people may not have the additional funds to invest in an ISA until this time of the year. Regardless of the reason, leaving it to the last minute to put your money in an ISA or to open a new one is never really the best policy.

A good example of this came last year when the April 5th deadline fell on Easter Monday. This meant that it came during a long bank holiday weekend and many people were caught out when their paperwork, sent in at the last minute, was unable to be processed in time due to the banks and financial institutions being closed in the days leading up to the end of the financial year.

Even though Easter falls later this year, it is still not a good idea to leave crucial financial decisions until the cut-off point, especially for those who are not yet fully aware of the new ISA limits and who would like to invest more this year than they have previously been able to.

The second reason that the present is a great time to review your ISA investments is simply that in the budget of 2010, the chancellor announced that from now on, the limits placed on ISA accounts would automatically be linked to the rate of inflation. The limit would be increased by the same rate as inflation, in increments of £120 (rounded up or down to the nearest figure), to help those who make monthly payments.

This means that as of 2011-12, the amount people can pay into a cash ISA will rise automatically to £5,340 and the amount payable into a stocks and shares ISA will rise to £10,680. Furthermore, should inflation continue, these amounts would automatically increase in future years.

The effect has been to make the ISA market a far less static market. It is no longer the case that an investor can set up an ISA, and make a regular monthly payment of the same amount year after year and know that they are taking full advantage of the tax free saving an ISA affords.

To ensure they are getting the most out of their money, large numbers of investors in ISAs are seeking independent help from investment specialists. These experts can advise investors not only on which ISAs are performing particularly well and which kinds of ISA best suit their current situation, but they can manage their investment in their ISAs and ensure that their client is kept up-to-date with the changes to limits or any other changes made to the ISA system.

The new rules and limits regarding ISAs are an attempt to encourage more people to save profitably with a view to the future. It is, therefore, the perfect opportunity to review your investments and how much you are paying into them, not just to meet the April 5th deadline for this financial year, but to ensure that your investments continue to sustain future growth and are as beneficial for you as possible.

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<h1>Why Now Is The Best Time To Review ISA Accounts</h1> Author: <a href='http://www.articleseen.com/profile_Eve Landford.aspx'>Eve Landford</a> Are you sure that your investments are in the most profitable place possible? Do you know which are the best ISAs for you and your money? Do you realise that new legislation has changed, and will continue to change, the amount of money you can invest annually in your chosen ISA accounts? If you are unsure about any of these matters, then now is the time to act to shore up your investments and ensure they are performing for you as strongly as possible.

It is tempting to think that when you first considered taking out an ISA to invest in, the hard work was complete. No doubt, many investors wisely chose to compare ISAs to see what the best options available were. Many will have opted to choose a cash ISA that offers a higher rate of interest but perhaps less accessibility to the funds. Some will have chosen a cash ISA that offers a lower rate of interest, but the ability to access the funds quickly. Other investors may have chosen to invest in the stock and shares ISA, assessing the risk of such an investment over the likelihood of seeing a decent return on their investment.

In recent years however, the rules governing how much can be invested in each type of ISA each year has changed, which has meant that many investors need to review how much they are paying into their ISA to ensure they are getting the best possible return from their money.

For cash ISA accounts, the amount you could invest remained at £3,000 per annum, from 1999, up to 2008. In 2009, however, that limit was increased to £3,600 for the next two years before the government announced that for the current financial year of 2010-11, the limit would rise considerably to £5,100.

For those with stocks and shares ISAs, the rise has been equally sharp. From £7,000 a year being the limit in 2008, to the increased limit of £7,200 in 2008-09, before being set at £10,200 for the current financial year.

It is therefore imperative for those who continue to invest in their ISAs annually that they are made fully aware of the changes to the limits of investment in each type of ISA, which translated means that they can invest more into the ISA and seek a greater return on their money.

The reason why now is the best time to do this is twofold. The first is to do with an anomaly in the English calendar and the second is to do with potential future increases to the investment limit for ISAs in subsequent years.

First of all, it is widely recognised by financial institutions and experts that many people tend to leave their ISA investment to the last minute. There may be many reasons for this; some people like to have capital available for them to use rather than locked away in an ISA, or some people may not have the additional funds to invest in an ISA until this time of the year. Regardless of the reason, leaving it to the last minute to put your money in an ISA or to open a new one is never really the best policy.

A good example of this came last year when the April 5th deadline fell on Easter Monday. This meant that it came during a long bank holiday weekend and many people were caught out when their paperwork, sent in at the last minute, was unable to be processed in time due to the banks and financial institutions being closed in the days leading up to the end of the financial year.

Even though Easter falls later this year, it is still not a good idea to leave crucial financial decisions until the cut-off point, especially for those who are not yet fully aware of the new ISA limits and who would like to invest more this year than they have previously been able to.

The second reason that the present is a great time to review your ISA investments is simply that in the budget of 2010, the chancellor announced that from now on, the limits placed on ISA accounts would automatically be linked to the rate of inflation. The limit would be increased by the same rate as inflation, in increments of £120 (rounded up or down to the nearest figure), to help those who make monthly payments.

This means that as of 2011-12, the amount people can pay into a cash ISA will rise automatically to £5,340 and the amount payable into a stocks and shares ISA will rise to £10,680. Furthermore, should inflation continue, these amounts would automatically increase in future years.

The effect has been to make the ISA market a far less static market. It is no longer the case that an investor can set up an ISA, and make a regular monthly payment of the same amount year after year and know that they are taking full advantage of the tax free saving an ISA affords.

To ensure they are getting the most out of their money, large numbers of investors in ISAs are seeking independent help from investment specialists. These experts can advise investors not only on which ISAs are performing particularly well and which kinds of ISA best suit their current situation, but they can manage their investment in their ISAs and ensure that their client is kept up-to-date with the changes to limits or any other changes made to the ISA system.

The new rules and limits regarding ISAs are an attempt to encourage more people to save profitably with a view to the future. It is, therefore, the perfect opportunity to review your investments and how much you are paying into them, not just to meet the April 5th deadline for this financial year, but to ensure that your investments continue to sustain future growth and are as beneficial for you as possible.About the Author: Do you know which are the <a rel="nofollow" href=https://www.fidelity.co.uk/>best ISAs</a> for you and your money? ISAs are long term commitments, so it’s important to research before making any final decision. Article Source: <a href='http://www.articleseen.com/Article_Why-Now-Is-The-Best-Time-To-Review-ISA-Accounts_57483.aspx'> http://www.articleseen.com/Article_Why Now Is The Best Time To Review ISA Accounts_57483.aspx</a>

Article Source : http://www.articleseen.com/Article_Why Now Is The Best Time To Review ISA Accounts_57483.aspx

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Do you know which are the best ISAs for you and your money? ISAs are long term commitments, so it’s important to research before making any final decision.

Keywords : ISA accounts, best ISAs, compare ISAs,

Category : Finance : Finance

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