Many people are missing out on the benefits of ISAs due to the myth that they are a complicated version of your typical savings account, but the truth is - ISAs aren’t that much different - they just come with added benefits.
To put it simply, an ISA is a type of savings account that allows you to earn interest tax-free.
To illustrate, with regular savings accounts, the interest that you receive will be taxed at 20 per cent for regular tax payers and 40 per cent for higher rate tax payers. Most of the time, you won’t have noticed this loss as the money is taken before it enters your account.
However, thanks to the introduction of a new and improved ISA (NISA), savers over the age of 16 can now save up to £15,000 a year and not pay tax on the interest they receive. In order to make use of the new £15,000 ISA allowance, you need to place your money in an ISA account, rather than a regular easy access, fixed rate or notice account. And as the allowance is tax year specific, you’ll need to open it before 5th April 2015 to take advantage of the tax benefits on your savings for this year.
There are a number of ISAs available with varying interest rates and terms, and to help you to understand these hard working savings accounts in greater detail, we’ve created this Beginner’s Guide to ISAs:
Here at Aldermore, we have a team of experts on hand to help you to find the right ISA account for you. Please don’t hesitate to get in touch with our team to find out more.
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