Could you be an ISA millionaire?

Individual Savings Accounts (ISAs) are a great way to invest free of tax on the income and any capital gains. The amount you can put in each year has gradually increased. A growing number of people are becoming ‘ISA millionaires’ as a result of rising stock market prices, and the steady increase in the annual ISA allowance.

The allowance for the 2018 – 19 tax year remains at the current limit of £20000, meaning that couples can put away up to £40000. Sadly, it seems that the ISA message hasn’t filtered through to everyone. HMRC has produced data that shows  only two thirds of those earning more than £150000 a year use up their ISA allowance each year.

With pension contributions subject to annual and lifetime limits, ISAs represent an excellent way of topping up retirement income, although the cash or shares could be subject to inheritance tax on death, unlike the types of pension that can be passed on to beneficiaries more tax-efficiently.

If you’re planning to invest this tax year, it’s a good idea to put plans in place as early as possible. The longer your money is invested, the more time it has to produce tax-free returns.

You can’t carry any unused ISA allowance into the next tax year, so don’t risk missing out on the valuable tax breaks available. We can help you investigate the choices on offer, and help ensure you use your allowance wisely.