The deadline for 2015/6 ISA contributions is on the horizon and provides the opportunity to invest £15,240 (£30,480 per couple) in an extremely tax efficient environment. Rules now allow you to combine both cash and stocks & shares within the allowance and it is important to remember contributions can be made using single and regular monthly contributions or a combination of both.
In addition, with interest rates on Cash ISA accounts at an all time low those looking at medium to long term growth have the opportunity to transfer to a Stocks & Shares based ISA (and vice versa). Any transfers are in addition to the £15,240 annual allowance.
ISA’s can be used for a multitude of purposes, for example supplementing retirement income, and all withdrawals are made free of both income and capital gains tax. With State Pension ages increasing for many those seeking early retirement have the opportunity to bridge the gap by using accumulated ISA funds to supplement their income.
It is a startling fact that a couple utilising their annual allowance since the inception of PEP’s in 1986 (the forerunner of ISA’s) would have invested in excess of £450,000 to 5th April 2015. With compound growth it is reasonable to say they would be well on their way to accumulating £1m in a tax efficient environment.
The deadline for 2015/6 contributions is 5th April 2016 and those looking to act should contact their adviser.