1 July 2014 ISA (NISA) changes
ISAs changed for the better from 1 July 2014, making them even more flexible to suit your savings and investment needs. There continues to be two types of ISA: a cash ISA and a stocks & shares (or Investment) ISA, but you now have more freedom to use them as suits you. Below is a summary of the ISA changes and how you can make the most of them.
More to invest in any way you wish
The 2014/15 ISA allowance increased from £11,880 to £15,000 on 1 July 2014 and will increase further for the 2015/16 tax year to £15,240 on 6 April 2015. This means you can protect more of your returns from further UK Income Tax and Capital Gains Tax, helping your money work harder.
You’ll have much more flexibility in how you choose to split your ISA allowance. You can use it all in a cash ISA, all in an Investment ISA (stocks and shares ISA) or split it in any way that suits you, helping you strike a balance between risk and return.
Greater flexibility to transfer
From 1 July 2014 you can stocks & shares ISAs. This means that if you are looking for the potential of a better rate of return on your cash ISA and are prepared to accept the increased risk to your capital, you can transfer your cash ISA money into an Investment ISA.
You can also now transfer from an Investment ISA into a cash ISA. This means if you would like to reduce the risk to your capital, want to move away from investments in a period where there is market turbulence or diversify your portfolio at any point, then you are free to transfer into a cash ISA.
As there will no longer be any restrictions around transferring previous year subscriptions between the two types of ISA, you can move freely at any point to suit you. You can also move payments made into ISAs in the current tax year, but if you do this, then you need to move the entire contribution.
Wider investment choice
The 1 July 2014 changes mean that you can hold a wider range of assets in your Investment ISA. You can now hold cash on a long term basis without any penalties being levied on the interest you receive. You’re also able to earn interest on cash balances of over £1,000, meaning your money will still be working for you even when not invested.
You can also now hold a wider range of shorter term investments, such as bonds and gilts which have less than 5 years to run to their maturity. Again, if you are looking to reduce the risk on your portfolio and are looking for certainty around the income you can generate, then these can be very useful tools, but were previously not allowed.
If you have a cash ISA and are looking to move into investing but have previously been concerned about risk to your capital then these new lower risk investments may be a suitable option for you.
Things you need to know
- Although ISA rules have changed, there are still two types of ISA available – a cash ISA or a stocks and shares ISA
- ISA rules may change in the future
- The value of this favourable tax treatment to you depends on your individual circumstances
- Investments can fall in value and you may get back less than you invested
- Our stocks and shares ISA is called Barclays Stockbrokers Investment ISA
- The current tax year will still run until 5 April 2015
- You can still only open and subscribe to one cash ISA and one stocks and shares ISA in a single tax year
- Any ISA you hold now will automatically benefit from the changes
- Investing without advice is not for everyone and if you’re unsure, please seek independent advice. Barclays Stockbrokers does not give advice.
Ready to invest?
Open an Investment ISA
- The value of your investments can fall as well as rise and you may get back less than you initially invested.
- Investing is not for everyone, if you are unsure please seek independent advice.