Are you making the most of your ISA allowance?

Making financial decisions is really important and ensuring that you receive the correct advice and act in the most tax efficient manner is paramount in achieving this.  With an unsteady economic outlook and increased taxes for many if us, it is important to take advantage of any tax breaks that are available. The annual ISA allowance is just such an opportunity and is currently £10,680 per individual for the tax year 2011/12.  This is due to increase to £11,280 in the tax year 2012/13.

With the changes in the economy we have seen savers suffer and interest rates have remained at their lowest in over 300 years for a sustained period of time and economists indicate this could continue for some time.  This does mean that potentially Cash which has often been perceived as the safest of asset classes is no longer the sole area to invest and other forms of investment may now need to be considered.  Low interest rates mean Cash ISA returns have suffered to such as extent that:

• The average rate of interest on Cash ISA is currently 1.17% (including introductory bonus accounts).
• This is less than half than the average rate when the Bank of England base rate was cut to its current level of 0.5%.
• The average rate on Cash ISAs is the lowest it has been since they were introduced in 1999.

 Source: Bank of England, October 2011

You many need to ask yourself, how much does my Cash ISA now pay and can I continue to solely pursue investing in Cash?  We can offer you a free no obligation review on your portfolio to assess the options available to you and to ensure that you are taking the right level of risk to achieve your financial objectives.

Managing your money

With well over 50,000 funds and over 5,000 fund house to choose from, there is plenty of choice but the key is being able to choose the right funds and to be able to manage this on an active basis.

If you are considering investing in an ISA in this tax year to make the most of the tax efficient opportunities this offers, now could be the right time. Alternatively, if you are considering how transferring your existing ISA portfolio might make it work harder for you we can help so please do not hesitate to contact Derek Evans at Ashley Law Crawley on 01293 817243.

The value of the investment can go down as well as up and you may not get back as much as you put in.