From tomorrow - the 1st of July, ISAs will be reformed into a much more simpler product - the new ISA (NISA), plenty of us have been excited for this day to arrive since the chancellor announced the plan in his speech but many of us still don't know what the difference is between the two and why's it changing. I've put together this post after doing some research over the weekend, and hopefully it will help the ones who like me was clueless to the changes!
For those of you who don't save, it's worthwhile to do so, that magazine you buy every week, can it be read online and save you some money? Can you make your daily coffee at home and cut out the expensive takeaway cost? Every penny really does count, and with the economy changing on a near daily basis, it's always better to play safe!
The Switch Itself:
Luckily, and surprisingly, those of us who hold current ISA accounts do not have to worry about grabbing our coats and making our way down to our nearest banking branch to make any changes for the NISA. Fortunatley our current ISAs will automatically convert into the NISA, so sit back, relax, stop searching for your nearest branch's opening times and call back the lunch date you've just cancelled!
The Benefits:
Many of us don't like changes, and can often be heard using the well known phase ''don't fix what isn't broken''. The current ISA system wasn't broken, nor needed fixing, but a major change was a welcoming to all ISA savers. Under the current system, only £5,940 can be paid into a ISA account within a tax year, shieding it away from the tax man himself.
However, under the new NISA system starting from tomorrow (July 1st), ISA savers can shield away upto £15,000! The money saved in the ISA can be invested in the stock market, or simply saved as cash, or even a mixture of both!
Children's ISA accounts are also benefiting from the change with their current ISA limit being set at £3,840 with the new change increasing the limit to £4,000.
Let's not to mention the money paid into our ISA accounts, both under the current system and the new system are tax free!
The Cons:
None, that I can find which directly relate to the new ISA system itself. Investing your ISA into stocks and shares is always worth investigating and nothing you should rush into. There is also the interest rates to keep an eye on, but overall the new change, a major one at that is a welcoming one for plenty.
Credit:
I have to give credit to the sources of course, my amazing grandmother, who never get's tired of constantly telling me the same thing's over and over again, Scottish Friendly's Twitter feed, and the chancellor (who I don't think I've ever wanted to thank before!).
What are your views on the new ISAs, are you in favour of them? Or would you prefer for the current system to carry on? Either way I'd love to hear your thought's below!
Jada x