Savers Can Now Invest More Each Year in ISA Savings Accounts - By: Patrick Finnemore

For anybody who is unsure about how to start off on the savings path, the news from Great Britain's 11 Downing Street that the yearly Individual Savings Account (ISA) allowance is to be moved from its present level of seven thousand two hundred pounds to ten thousand two hundred pounds is extremely welcome indeed and may well persuade many potential consumers to open an ISA as the first step in beginning to invest for the future. This major hike in the maximum limit that savers are permitted to invest annually is a strong signal that the British Government wants people to save more using this form of investment.

For those not familiar with ISA's (Individual Savings Accounts), a short summary may be handy. ISA's are now over ten years old and even before the news from Alistair Darling they had been thought of by many as a stable and reliable type of tax free saving. For anyone researching investment options the ISA is now sure to be an even more attractive prospect. Since they were introduced in 1999, the advantages that are on offer with Individual Savings Accounts have been pretty tempting. A further benefit is that no income tax is payable when you invest in an ISA.

Add to that the fact that no capital gains are payable on an ISA and the benefits of this form of saving become even more clear. You will learn that ISA's are available from an extensive range of sources, some of which are online while others can be found on the high street. These sort of investments are at the safer end of the spectrum - they are relatively straightforward too. Anybody who is a payer of tax and who is over the age of sixteen can start an isa savings account and they can do so with as small an investment as ten pounds. This illustrates a central point in the Governments thinking behind the setting up of ISA's - they are intended to encourage more citizens who have never saved before to start making provision for the years ahead.

Another plus point for ISA's is their flexibility. You can pick and choose how you wish to invest. There are different ways that are available when saving in an ISA ranging from cash ISA's to stocks and shares ISA's. You simply select the one that you feel to be right for you. A lot of people see investing in a cash ISA as a very secure form of investment because the returns are likely to be fixed and should be reliable. On the other side of the coin stocks and shares ISA's are considered likely to yield more but the snag is that a far higher level of risk attaches to this variety of investment.

As the volatility of the stock market has indicated over recent months any investment in stocks and shares carries with it a degree of risk and so the potential tax free returns are much less reliable. Presently the maximum amount that you can invest into a mix of ISA investments is ten thousand and two hundred pounds and the maximum that can be invested into a cash ISA is five thousand one hundred pounds. For consumers whether new to investing or not, ISA's are an increasingly attractive and versatile type of saving and should not be overlooked when looking at possible investments.

About the Author

Scottish Friendly offer a wide range of financial goods and services including isa savings

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