The end of the financial year is fast approaching, meaning the time left to make the most of your tax-free ISA allowance for this year is running out. George Square Financial Management gives a quick run-down on what you need to know to maximise your savings before the 5th April 2019.
What is the ISA allowance for 2018/19 and why should I use it?
If you have an ISA (Individual Savings Account), you can put up to £20,000 of tax-free money into it this tax year. This means that, as the 5th April 2019 signals the end of this tax year, you have less than a month left to really make the most of your investments for 2018/19. However, importantly, there will not be a roll over. Any allowance not used will be lost and the tax-free amount will reset for the new financial year.
How do I make the most of the tax-free ISA allowance 2018/19?
There are a number of ways to maximise your tax-free ISA allowance. Since the rules around the ISA system relaxed back in 2015, you can put the maximum amount (£20,000 this year) into either a cash ISA, a stocks and shares ISA, an innovative finance ISA, a Help to Buy ISA or the relatively new Lifetime ISA. You also have the option of splitting the amount between different ISAs, but be aware that there are limits as to how much can be put in the last two options. For example, you can only put £4,000 into a Lifetime ISA each year, leaving you with £16,000 to put into the other options. Check out our blog on the Lifetime ISA for a detailed look at some of its benefits.
How do I know how much I’ve used of my ISA allowance 2018/19?
Simple answer – check with your ISA provider. The team here at George Square are contacting our clients, informing anyone who has an ISA through us of exactly what they have invested already and what still can be invested before the deadline. Not all providers/advisers will do this, so it’s crucial that you check with your own provider to see what steps can be taken so that you don’t miss out.