Why You Should Be Taking Advantage Of Your Annual ISA Allowance

An Individual Savings Account is provided by the government and there are several different types to choose from. The cash ISA allows instant access to your money and has variable interest rates. The stocks and shares ISA is ideal for long term investment, although this can go up and down so there is no guarantee that you will get more for your money. The Junior ISA is for children and can be accessed when they turn 18. This is a good option for starting savings early. The ISA allowance currently stands at £15,000 and you can use one option or choose a combination. There are various reasons why you should take advantage of your annual ISA allowance.

Tax Free

The ISA is tax free, which means you don’t need to inform the tax man about your savings or declare it in your tax return. The tax year runs from 6th April to the 5th April the following year. It is more beneficial to invest at the very start of the tax year, in order to get the most out of your investments. If you use your full allowance of £15,000 and start saving at the beginning of the tax year, you could earn as much as £637.50 in interest within the year. This is a much better rate of interest than most other savings accounts, so it is well worth taking advantage of the tax free element of the ISA.

Increased Returns in 2015

The increase in returns for 2015 means there has never been a better time to start your savings with an ISA. You can really benefit from this tax free option and by investing from the beginning of the tax year, you will make the most of your investment.


Not only are there several options to choose from with an ISA, you can also customise them to suit your own circumstances. For instance, younger savers may benefit more from the growth ISA investments. Older savers may prefer the income producing ISA investments. ISA’s are useful for the flexibility they offer and can give you a good return for your money.

Best Savings Option

The tax free aspect of the ISA makes it one of the best ways of saving, although you can always choose to use this in addition to another savings account option. You can have instant access to your ISA account, which isn’t the case for many other savings accounts. With the tax free and instant access facilities, the ISA is a favourable choice amongst savers.

Less Risky

Although stocks and shares ISA’s can have an element of risk, cash ISA’s are risk free, so your investment will not decrease. There is no need to worry about losing your savings if there is another economic downturn as all ISA’s are covered by the Financial Services Compensation Scheme. This cover means that your savings are protected up to £50,000 for single accounts and £100,000 for joint accounts.