1 April 2020
Making the most of your savings ahead of the new tax year
With the 5th April marking the end of the current tax year, it’s your last chance to open a Lifetime, Junior or Stocks and Shares ISA to take advantage of the 2019/2020 tax-free allowance.
Here, Foresters Friendly Society looks at which ISA could best suit your needs and allow you to make the most of your savings and investments ahead of the new tax year.
Raising a family?
- A Junior ISA is one of the most tax-efficient ways to build a nest egg for your children’s future to help towards their first car, first home or university fees; for under 18s, once opened by a parent or guardian, family and friends can also help to pay in up to £4,368 in the 2019/2020 tax year, increasing to £9,000 in 2020/2021. With Foresters Friendly you can currently pay in as little as £26 per month or start with a lump sum of at least £500, plus you can make top ups from £50.
- A little known fact about the Junior ISA is that when a child reaches 16 they can hold both a cash ISA and a Junior ISA in the same year. This means that they can take advantage of the tax-free allowances on both accounts – totalling £24,369 in 2019/2020.
Want to buy your first home?
- A Lifetime ISA is designed for people aged 18 – 39 looking to buy their first home up to the value of £450,000. The Lifetime ISA offers savers a 25% boost from the Government on all contributions they make. This means you would receive a £1,000 bonus each tax year if you save the maximum £4,000. With Foresters Friendly Society, you can start saving with a monthly deposit of £100 to open a Lifetime ISA. But, if you are an existing member or the child/grandchild of a member then you can pay in £50 per month instead. You can also open a Lifetime ISA with a lump sum of at least £500, and top ups of £250 can also be made. A Lifetime ISA is also an option for those saving for retirement.
Thinking about the future?
- A Stocks and Shares ISA is a way to start investing for your future plans, whatever they may be. The Stocks and Shares ISA offered by Foresters Friendly has the potential for a greater return on your savings over the longer term than with a Cash ISA due to the different investment approach, although depending of the performance of the investment fund, you could get back less than you have paid in.
- The Stocks and Shares ISA allows you to save up to £20,000 per tax year. With Foresters Friendly Society regular payments start from just £50 per month, or you can open an ISA with a lump sum investment of at least £500. Thereafter you can make top ups of at least £250 – giving you the flexibility to control how much and how often you save.
Rachel Webb, Chief Executive of Foresters Friendly Society, comments: “With many different ISA products on the market it can be difficult to work out which one is best for you and where to start.
“There are ISAs suitable for all different ages and savings goals. Whether you have a specific goal in mind or just want to start investing, Foresters Friendly Society offers a range of products for you to choose from. You can use our product selector tool available on the homepage of our website along with individual product savings calculators to help you see which savings plan may best suit your needs and how much you could save.
Once you’ve opened your account, as long as you don’t exceed the annual tax-free allowance, you can pay into your ISA as regularly as you want.”
For more information about the ISAs from Foresters Friendly Society:
You should also be aware that in some investment conditions, you, or your child, may get back less than you have paid in. Please note that tax rules may change in the future and depend on your individual circumstances.
This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.