Personal Equity Plans & Individual Savings Accounts Leeds
Personal Equity Plans (PEPs) & Individual Savings Accounts (ISAs) are very attractive because money invested in them is not subject to income tax or capital gains tax. Keep reading to find out how to set up your own PEP or ISA.
Under the current rules, investors can transfer from one ISA manager to another at any time they wish, whether this be their current-year ISA subscriptions (and related income) or all or part of their previous years’ subscriptions. While subscriptions to stocks and shares ISAs can only be transferred to another stocks and shares ISA, subscriptions to a cash ISA can be switched to either a cash ISA or a stocks and shares ISA.
Five years on from the first vouchers being issued, the introduction of the CTF has revolutionised long-term savings for children. Since the beginning of 2005, the parents of all babies born in the UK on or after 1 September 2002 have been eligible to receive Child Trust Fund vouchers, worth £250 (£500 for low-income families), from the government. Further vouchers for the same amount are sent to parents when their children reach the age of seven.
As ever, the investment goals of the investor are the vital starting point. For example, a 30-year-old investor is likely to have a very different investment outlook to a 65-year-old facing retirement. For those who are more risk-averse, it is perhaps better to stick with cash ISAs, where capital will be safe and the decision on where to invest the money is based largely on the highest rates.
Income can be gleaned from a wide range of assets, including equities, bonds, cash and property and, like any other portfolio, investments for income should be diversified, giving exposure to different instrument types and sectors. Indeed, diversifying risk might be seen as especially important in an income portfolio since you may be reliant on the regular payments.
Investors are being urged to shake off any misconceived views about ISAs, both new and old, in order to make the best of the tax breaks available to them. Read on to know the details.
Dividends paid within an ISA are free of income tax, but any interest earned on uninvested cash held within an ISA is subject to a 20 per cent tax charge. HM Revenue & Customs (HMRC) rules state that cash can only be held within a stocks and shares ISA for the purpose of investment, and the 20 per cent tax charge is imposed by HMRC to deter investors from holding cash within this product.
Investors are being urged to shake off any misconceived views about ISAs, both new and old, in order to make the best of the tax breaks available to them. Read on to know the details.
A self-invested personal pension (SIPP) differs from a traditional personal pension in that it allows the holder to take more control over their investments. The easiest way to understand it is to think about it being like an ISA, in that a SIPP is a tax-efficient wrapper into which you can place certain types of investments, such as listed stocks, mutual funds or even commercial property.
In terms of financial planning, ISAs (in addition to their forerunners, PEPs and TESSAs) have long played a key role due to their tax advantages. Here Derek Gawne outlines how ISA investors can plan ahead to maximise their returns without taking too much risk.
Growing up in Britain isn’t going to be easy for the next decade or two, with a broken economy, crippling university fees and rampant youth unemployment. Your children or grandchildren are going to need all the financial support they can get, so the sooner you start investing for their future, the better. Here Harvey Jones uncovers those unit trust and investment trust schemes available to parents saving for their child’s future.
This article suggests a strategy for investors looking for the best financial advice. Read on to get the right help for financial issues.
When you open an ISA you pay your own money into a designated tax-free account approved by the Inland Revenue. That is why an ISA is regarded as a type of account rather than a type of investment.
Finding a steady source of acceptable income remains one of the biggest problems that investors face today. This is a common bugbear of mine, as the name that a fund has can be very misleading for someone who is not familiar with the Investment Management Association (IMA) sectors. A number of funds carry the name ‘income’ or ‘high income’, but for an investor seeking a high income in the non-investment-world sense, they are little more than useless.
Fifty quid – what two stockbrokers might spend on a very light lunch, but only if both were drinking mineral water rather than wine. If you proposed to either of them that you were considering investing £50 a month, they’d probably laugh at what is, in their opinion, a trifling amount. But even in 2008, fifty quid is fifty quid and, although it equates to £600 a year (or just under nine per cent of the current £7,000 annual ISA allowance), over the years, if invested sensibly, those regular £50 investments could mount up to quite a significant sum.
The whole point of a savings account is that you entrust your money to the institution paying the best rates of interest, and these change weekly, sometimes daily.
As ever, the investment goals of the investor are the vital starting point. For example, a 30-year-old investor is likely to have a very different investment outlook to a 65-year-old facing retirement. For those who are more risk-averse, it is perhaps better to stick with cash ISAs, where capital will be safe and the decision on where to invest the money is based largely on the highest rates.
Catherine Neilan explains how using ISAs for regular savings can build a sizeable portfolio. ISAs are seen as an obvious starting point for anyone looking to build up their savings pot. After all, it can be argued that failure to use the full annual allowance is giving money back to the taxman.
Five years on from the first vouchers being issued, the introduction of the CTF has revolutionised long-term savings for children. Since the beginning of 2005, the parents of all babies born in the UK on or after 1 September 2002 have been eligible to receive Child Trust Fund vouchers, worth £250 (£500 for low-income families), from the government. Further vouchers for the same amount are sent to parents when their children reach the age of seven.
The stock market is struggling to deliver a few things at the moment – like security, certainty and shortterm profit. But what it is delivering are opportunities, and plenty of them. Sarah Coles considers the options available to those who want to choose their own ISA investments.
With investment returns plummeting and most economists predicting a prolonged recession, investors could be forgiven for thinking that the last thing they should be doing is investing in an individual savings account (ISA). Keiron Root reminds savers that investing in ISAs should be a long-term commitment.
The CTF is effectively an ISA for kids, one that will legally become available to them at 18. Obviously, kids cannot invest into their own ISA until 16, at which point they can open a cash ISA, so this is a way of investing for them while leaving your own ISA allowance available for saving for your future.
One of the less desirable consequences of the current downturn in global markets is that investors will be tempted to sit on their hands and do nothing until there are clear signs of improvement. Here Keiron Root identifies some forward-looking options for ISA investors.
If your wife needed to move into a care home she would have to meet the full cost herself, if her savings exceeded the means-test limit. The local authority should only financially assess the person that needs the care, so your savings should not be taken into account. If your wife owns a share of your home, this is also disregarded as long as you continue to live there.
Multi-manager ISA,s or fund of funds, are funds investing in a range of funds. Multi-manager refers to the multitude of managers running all the funds that go into the overall portfolio.
Government estimates show that over seven million people are not saving enough to achieve a reasonable income in retirement. Tim Jones, CEO of the Personal Accounts Delivery Authority, outlines why 2012 is an important year for pension savers.
Income can be gleaned from a wide range of assets, including equities, bonds, cash and property and, like any other portfolio, investments for income should be diversified, giving exposure to different instrument types and sectors. Indeed, diversifying risk might be seen as especially important in an income portfolio since you may be reliant on the regular payments.
When it comes to our children, there are all sorts of risks we are not prepared to take. We use two thermometers and an elbow to check the bath water isn’t too warm, so we are unlikely to want to risk the kids getting into hot water financially either. It means that when we’re choosing investments, the vast majority of people err on the side of caution. As Ashley Clark, a director of needanadvisor.com, says ‘The default option for parents is to play it fairly cautiously for their children.’
The standard advice that is generally given to investors in this sort of situation is to make sure that their pension fund is invested in a portfolio that contains a broad range of assets, including cash, fixed-interest, property and equity funds.
Under the current rules, investors can transfer from one ISA manager to another at any time they wish, whether this be their current-year ISA subscriptions (and related income) or all or part of their previous years’ subscriptions. While subscriptions to stocks and shares ISAs can only be transferred to another stocks and shares ISA, subscriptions to a cash ISA can be switched to either a cash ISA or a stocks and shares ISA.
If you let someone else choose things for you, it makes the decision process easier and quicker, but you’re never going to get exactly what you want. If you opt for a box of chocolates, for example, there’s bound to be some unpopular flavour scudding around at the bottom.
As the Child Trust Fund adverts keep telling us, you never know what your child is going to grow up to be. However, if they were born before the scheme was introduced – i.e. before September 2002 – or you don’t want to lock your money away, or you don’t like the idea of your child automatically getting the stash at 18, there’s a good chance your child is going to grow up to be disgruntled and short of cash – unless you investigate the other options available.
If you are unhappy with the rate that you are currently receiving from your cash ISA because the bonus period has ended, or if your equity ISA is underperforming, you don’t have to endure it. The good news is that you can switch your current tax year ISA, or, indeed, ISAs from previous tax years from one manager to another.
Bryan Collings, manager of the Ignis HEXAM Global Emerging Markets Fund, outlines ten reasons why it is more important than ever for investors to have sufficient exposure to emerging market growth.
Although PEPs have now been superceded by ISAs, existing PEP portfolios can still be actively managed and can be transferred from one PEP manager to another.
From Wall Street bankers to the judges on Strictly Come Dancing, it has become fashionable to mistrust experts. Investment management is not immune either, with many investors feeling that the people to whom they have entrusted their money have not negotiated turbulent markets with sufficient skill. Cherry Reynard considers ISA schemes designed for savers who want a fully managed investment portfolio.
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