Before 5th April each year you have the opportunity to invest up to £15,000 in a new Individual Savings Account (NISA), this is the maximum an individual can save in the tax efficient wrapper (cash and/or stocks and shares).
The old ISA rules governed how much you could put into each pot; half the allowance in cash and half in shares, or you could simply invest the whole annual allowance into equities or equity based funds.
However, even though from July last year the annual limit is still £15,000 (£15,240 from April 2015), you now get to choose how you split this between equities and cash, or not! As you can invest the whole annual allowance into either cash or equities.
You must save or invest by 5 April, the end of the tax year, for it to count for that year. Crucially, any unused allowance doesn’t roll over – so if you don’t use it, you lose it forever. You’ll get a new allowance the next tax year, but won’t be able to contribute anything to the old ISA.
Any savings or investments which stay within the ISA wrapper will continue to earn interest and reap the tax benefits until you withdraw the money.
**The value of investments may fall as well as rise and you may get less back than you invested.
The Financial Conduct Authority does not regulate tax advice.