NISAs - End of Year, Part 1
As the end of the financial year approaches in April, taking stock of the performance of your savings is an essential task for anyone who wants to see their personal wealth grow effectively year on year. This blog is a useful guide to savers who invest in NISAs and want more for their money.
Tax Efficient Savings
The annual allowance that a saver can invest in an NISA without incurring tax on their nest egg in 2014-15 is £15,000 per year, and it can be divided between cash and stocks and shares, depending on your preferred method of investing. While most cash ISAs are free to open, a stocks and shares ISA will normally incur a service fee.
It is also important to remember that high value stocks and shares portfolios can still face capital gains tax and taxes on dividends. If you invest in shares heavily, it is essential to check the overall annual cost of your ISA, as monthly charges over time can stack up.
No broker, fund manager or financial advisor is a better guardian of your wealth than you are, since you are the person who cares the most about your savings. As such, the only way to build your personal wealth is to keep a close eye on it and carry out at least an annual savings audit. Checking up on your rate of interest, return, and any costs that might be associated with the account you have is vital. Money is easily lost by simply assuming that it is in safe hands or that your NISA is working for you as hard as it can.
Best rates available coming up to end of tax year
The end of the tax year starts to resemble financial products ‘Black Friday’ as we move into February and March. Banks and building societies know that you are likely to be scrutinising your investments and they offer attractive deals in the hope they can poach your custom. With this in mind, don’t simply settle for the first NISA that comes your way, you are in a buyer’s market and you afford to hold out for a good offer.
These market conditions are unlikely to emerge for a further 12 months so it’s important to make the most of them while they last.
Maximise your investment for this tax year
If you feel you missed valuable opportunities in the past twelve months to keep your hard earned personal wealth safe from the predations of the tax man, then the end of the tax year is a perfect opportunity to make a difference.
By being proactive about managing and monitoring your savings and shifting money out of NISAs that aren’t performing into ones that are, you can save a considerable amount on larger investments.