A Lichfield financial expert is urging people aged over 50 to take advantage of new tax free allowances on Individual Savings Accounts (ISAs).
There are two types of ISAs available which include Cash ISAs and Stocks & Shares ISAs. From October 6 a Cash ISA will have a £5,100 yearly tax free allowance with a Stocks & Shares ISA having a £10,200 annual tax free allowance.
Kevin Jenkins of Key Financial Management, a trading name of 2plan Ltd, said:
“The increase equates to an extra £3,000 of tax free savings per year for people born before April 5, 1960. However, the Treasury has confirmed that if your birthday falls between October 6, 2009, and April 6, 2010, you will be able to take advantage of the increased allowances on, or after, the day you turn 50”.
Should all of Lichfield ’s over 50’s invest their tax free allowance of £3,000 then they would protect a combined total of £105 million from tax, based on figures from 2001.
To use the increased tax free allowance the over 50’s can:
- top up their current ISA’s, so they can invest an extra £3,000 into a Stocks & Shares ISA or an extra £1,500 into a Cash ISA
- open a new Cash and or a new Stocks & Shares ISA (so long as one hasn’t been opened in this tax year) with any unused allowances
- invest any unused allowances in different funds, shares and assets of an existing Stocks & Shares ISA so long as they do it with the same provider
- transfer holdings in a Cash ISA to a Stocks and Shares ISA without loosing the tax free status or using the current tax years ISA allowance.
Kevin continued:
“It is being widely reported that we are entering an economic recovery which means that we could about to be entering a period of tax increases. With this in mind I would advise the over 50’s to take advantage of this tax free increase in order to optimise the tax efficiency of their money now.
“I would also recommend for people to obtain independent financial advice rather than seeking advice from an adviser who is tied and can only either advise on the products of one provider or from a limited selection of providers.”
