April marked the 18th birthday of the Individual Savings Account and saw the annual allowance boosted significantly to £20,000 – an increase of over 30% and a clear signal that the government recognises the importance and popularity of ISAs in the savings landscape. One in four adults now invests in an ISA¹.
Yet only 9% of ISA investors make full use of their allowance. Furthermore, despite the record low returns on offer and the impact of rising inflation on the real value of cash, 80% of subscriptions continue to be deposited in Cash ISAs¹.
The full tax saving and investment benefits of ISAs can only be achieved by investing for the long term, so it makes sense to use your allowance early in the tax year to put your money to work – and out of the taxman’s reach – for longer.
¹ HMRC, September 2016
The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested. An investment in a Stocks and Shares ISA will not provide the security of capital associated with a Cash ISA.
The favourable tax treatment given to ISAs may not be maintained in the future, as they are subject to changes in legislation.