Call us on 01228 711888 Menu

Savings and investments

No major announcements in the 2017 Budget regarding savings and investments but the Government is still committed to supporting savers………..

National Savings & Investment bond (NS&I)

The new NS&I three year bond, which was announced in the 2016 Autumn Statement, goes live from April 2017.  The Chancellor confirmed that this will pay interest at the rate of 2.2% on savings up to £3,000.

Individual Savings Account (ISA) allowances go up

The amount you can save into an ISA rises from £15,240 to £20,000 from April 2017.

The Lifetime ISA, or “LISA”, launches from April 2017, its purpose being to help fund a first-time property purchase and save for retirement.

Savers aged between 18 and 39 on 6 April 2017 can put £4,000 a year into a LISA, which will be topped up with a 25% Government “bonus”, making a total of £5,000.  As with other ISAs, you can put money in cash or invest in funds and shares.

You can only take out your cash penalty-free from age 60 or if you are using it for a deposit to purchase your first property.  Cashing in early for any other reason will see a 25% exit penalty applied.

Inheritable’ ISAs improve

The rules by which ISAs may effectively be “inherited” after the holder’s death will be relaxed as early as next month, which is fantastic news.

Currently, although the Income and Capital Gains Tax breaks within an ISA expire on the death of the ISA holder, the surviving spouse can set up a new ISA for an equivalent amount.

New legislation due to come into force later this year will mean that income and growth of the assets inside the ISA will remain exempt from tax during the process of transferring them to the new owner.  The precise rules have still to be finalised.

David Allen Financial Services, as Independent Financial Advisers, can help you make the most of your savings and investments and ensure your retirement planning makes the most of the tax advantages available.  For an initial discussion to see how we can help, please contact one of our team on 01228 711881.