News
New ISA allowance for over 50’s - available from 6th October
02/10/2009
From 6th October 2009, the annual ISA subscription limit will increase to £10,200 for anyone eligible to invest in an ISA who was born on, or before, 5th April 1960 (that is, who will be aged 50 or over during the current tax year).
From this date, up to £5,100 of the new ISA allowance can be saved in a Cash ISA with one provider and the remaining £5,100 can be invested in a Stocks and Shares ISA. Alternatively, the full £10,200 can be invested in a Stocks and Shares ISA.
These higher limits will apply to all eligible ISA investors with effect from 6 April 2010, which means that you have the potential to top-up your existing ISAs now and make full use of the new allowance for this tax year before it is opened up to everyone in April 2010.
It’s important that you make the most of your tax allowance each year as it cannot be carried over, so act now to ensure your money is working as tax efficiently as it can for you.
Out of 18 million ISA account holders in the UK, only 5 million use the full allowance each year meaning people are missing out on the tax-break opportunities available to them.*
* Source: finance markets, 22 April 2009.
What does this new ISA allowance mean?
Example 1
An individual is aged 65 and has not opened an ISA in tax year 2009/10. From 6 October 2009 their ISA allowance will be £10,200. Up to £5,100 of his allowance can be saved in a Cash ISA and the remaining £5,100 can be invested in a Stocks and Shares ISA. Alternatively, the full £10,200 can be invested in a stocks and shares ISA with one provider.
Example 2
An individual is aged 70 and has opened a Cash ISA in the 2009/10 tax year in which they have already subscribed £3,600. From 6 October 2009 they will have an ISA allowance of £10,200 which means they could save up to another £6,600 in ISAs. From this additional amount, up to £1,500 could be invested in the same Cash ISA and then £5,100 in a Stocks and Shares ISA or the whole £6,600 could go into a Stocks and Shares ISA only.
Example 3
An individual’s 50th birthday falls on 15 March 2010. They have opened up a Stocks and Shares ISA in the 2009/10 tax year in which they have already subscribed £7,200. From 6 October 2009, they could save up to another £3,000 in ISAs - this could be up to £3,000 in the same Stocks and Shares ISA, up to £3,000 in a Cash ISA or a combination of both.
To find out more about ISAs or to invest, simply speak to your local SFS adviser, call us on 0800 085 0459 or click here for us to give you a call.
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