ISA changes that will affect you

ISA Changes that will affect you.

In this article Duncan Jeffrey, Vantage Transfer Manager, Hargreaves Lansdown discusses the changes to ISA rules that could affect you.

Find out how to save up to £560 on this year's ISA with our FREE
Investor’s guide to ISAs.

On 6 October the annual ISA allowance will increase from £7,200 to £10,200 for investors aged 50 or over this tax year. From 6 April 2010 this new allowance is extended to anyone aged 18 or over. Together with last year's new rules, this rounds off the most significant changes to ISAs since their introduction ten years ago.

All the benefits remain. Within an ISA you pay no capital gains tax and no further tax on the income. The new rules simply mean ISAs become more flexible and allow you to shelter more of your assets from tax than ever before. We welcome these changes.

What can you do now?
We will be ready for the new allowance as soon as it becomes available. If you are 50 or over this tax year and thinking about opening an ISA don't delay. The sooner you invest, the sooner your money starts working for you and the sooner you start saving tax. This means you could invest £7,200 now and invest a further £3,000 from 6 October.

If you have already fully subscribed to an ISA this tax year you will be able to top up your ISA to the new limit from 6 October if you are 50 or over this tax year.

With taxes almost certain to rise it is equally important to ensure that you are getting the best out of your existing ISAs. Moving them into Vantage could help you do this.

We could save you money every year on the ISA holdings you are happy with or help you revive a poor performing ISA. You can now also transfer Cash ISAs into a Stocks & Shares ISA and, if you understand the risks, choose an investment with a potentially higher yield.

Please be aware you have immediate access to your cash in most Cash ISAs and it is guaranteed - up to £50,000. In Stocks & Shares ISAs the value of investments and the income paid can fall as well as rise, so you could get back less than you invest. Interest in a Cash ISA is also paid gross. In a Stocks & Shares ISA the only types of investment where the income is paid gross are corporate bonds and other fixed interest stocks. On everything else, including cash, the income is paid net. In addition once you have transferred to a Stocks & Shares ISA you cannot transfer that ISA back to a Cash ISA.

Your valuable tax wrapper will be preserved when you transfer and with all your ISAs under one umbrella and instant access to your portfolio online, managing your ISAs could become so much easier.

Save money every year
It doesn't matter where you originally bought your ISAs, in almost every case you can simply transfer them as they are, keep the investments you currently hold, and preserve the ISA wrapper. Then, once held within the Vantage ISA, you could receive annual loyalty bonuses of up to 0.5 Percent a year - a saving of up to 33 Percent of the annual charges you are already paying - or up to £500 on a £10,000 investment over the next ten years, more if your investments rise in value.

Revive a poor performing ISA
With taxes increasing you cannot afford to let your ISA investments waste away. Many investors do not realise they can change the investments they hold within their ISA whilst preserving the ISA wrapper. If you hold ISA investments that aren't performing why not switch into something with greater potential?

You could transfer as 'cash' and choose a new investment straightaway. Alternatively transfer your ISA as it is and once the transfer has completed you can switch your investments online at the touch of a button or with one simple phone call when you feel the time is right.

Make it easier to manage your ISAs
With all of your ISAs in Vantage they will be much easier to manage, you can also transfer any other investments into Vantage so they are all held in one place. You will be able to monitor, and make changes to your portfolio online, by telephone or by post.

Knowing exactly what you hold will help you make better investment decisions. You will have greater control, a wider investment choice and we can offer you all the information and guidance you need to help you make more of your money. If you ever have a query simply call us. There are no recorded messages telling you to "press one for this and two for that" and no being passed from pillar to post by disinterested call centre staff thousands of miles away. You will just talk to bright people who know exactly what they are talking about.

Transfer to Vantage and we'll also be able to call up your investment details straightaway and almost always answer your question there and then.

How to transfer
Transferring your ISAs and funds to Vantage is easy. Once you have read the Key Features and Terms and Conditions all you need to do is complete the transfer form .

You could transfer for free from over 50 fund management groups if you act by 30 September. Find out more about transferring for free .

Your ISAs are one of your most important tools to protect your investments from tax so why not transfer today and let us help you make more of your investments.

For tips on how to make more of ISAs please request your FREE copy of our Investor’s guide to ISAs.

Duncan Jeffrey
Vantage Transfer Manager
Hargreaves Lansdown

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