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Your Money > Savings Articles > Are you ready...
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By Sarah Modlock
And once you have filled up this year's account, you can enjoy higher limits which come into force from 6 April 2008. Currently you can invest:
Under the changes in the new tax year you will be allowed to save up to £3,600 in a cash ISA and up to £7,200 in a stocks and shares ISA, within an overall annual savings limit of £7,200. This means some savers will have a lower investment ceiling for their stocks and shares than they do now - the raised, cash limit of £3,600 means that someone who chooses to save the maximum cash each year will only be able to invest £3,600 in stocks and shares - less than the current limit of £4,000 a year. The measly 3% increase to limits after nine years is much lower than expected but I guess we should make the most of the little on offer. Apparently the limits were partly decided on the basis that they are divisible by 12, making monthly saving easier. But don't let frustration with the small amounts stop you from making the most of what is on offer.
Other changes mean that your previous year's cash ISA savings can be transferred into stocks and shares ISAs. From 6 April your Personal Equity Plans (PEPs) will be renamed ISAs and will be able to have the same flexibility as ISA savers enjoy. Current offers - how 0.1% can make a difference "This year the battle for a slice of the tax-free savings market has kicked off earlier than usual, with two of the current top three best buys (Scarborough BS and Icesave) having been launched in the last month," says Michelle Slade of Moneyfacts. If previous years are anything to go by we will see a glut of new ISA deals being launched in the next few weeks, but be warned; many of them will only be around for a couple of months before being pulled from the shelves." "It's refreshing to see that the best buys this year aren't dominated by accounts with bonuses. Large bonuses for limited periods mean that the once great rate you originally plumped for, suddenly don't look so appealing 12 months later," she adds. "All the best buy accounts listed below accept a transfer-in so it's a good time for anyone with any existing ISA savings to move them to a better deal. With many savers having a five figure balance, the odd 0.1% can make quite a difference." If you're looking for a consistent mini cash ISA, Michelle Slade says the Direct ISA from NS& I has been the most consistent over the last 18 months and currently pays 6.05%. The most consistent mini cash ISA when judged over the last three years is the Yorkshire BS e-ISA that currently offers 5.80%.
Source: Moneyfacts.co.uk 5.2.08 Use it - don't lose itNationwide estimates that, during the current tax year, savers could be paying more than £230 million extra in tax by failing to take advantage of their yearly ISA allowance. Only a third of the population currently hold an ISA and many of these fail to top up their account on a yearly basis. "Millions of people fail to do this each year and are simply allowing their hard-earned money to line the Chancellor's coffers," says Nationwide's savings director, Matthew Carter. Broker TD Waterhouse says investors remain confident in ISA investment despite recent reports of investor nervousness on the back of market volatility. It says sales of equity ISAs are up two-fold in the last three months compared to the same period in the previous year. "There have been some reports in the last week that this year's 'ISA season' will be flat as a result of recent volatility in the stock market and a number of fund managers expect that investors' nerves will impact ISA sales in the lead up to the tax-year end," says TD Waterhouse Chief Executive Angus Rigby. "However, at TD Waterhouse our investors remain undeterred and are still riding the ISA wave, buying shares and equity funds through ISAs."
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