Fully flexible ISA
The rules for ISA accounts change regularly but this one is significant to all ISA savers. This new rule will allow savers to withdraw and re-deposit funds in the same tax year up to their full ISA allowance.
This new ruling comes into effect on 6 April 2016.
- Current rules mean if you invest in the full £15,240 annual allowance and then withdraw some of this money, you cannot re-invest or ‘top-up’ to the full allowance in the same financial year
- From 6 April 2016 you will be able to withdraw and then re-deposit funds you have already saved in the same tax year
Another development for ISAs is the requirement for providers to ensure ISA transfers will only take 7 days rather than the current 15 days to complete. This change is due to come into place in January 2017 and will be a mandatory requirement for all providers of ISA products.
Help to Buy ISA
This is a new savings initiative which was announced in the last Budget to encourage and help first time buyers save for that all important deposit and to get them on the property ladder.
The new scheme will launch 1 December 2015 and will allow savers to deposit up to £200 per month with the additional benefit of the Government topping up the deposit by 25 per cent upon the account closure.
For those wishing to take advantage of the Help to Buy ISA (HTB ISA), there are a number of advantages in doing so.
- A maximum initial deposit of up to £1,000 plus the initial £200 deposit can be placed in the HTB ISA to kick start savings
- The minimum needed to save to get the bonuses is £1,600 (which equates to a £400 bonus) and the Government will contribute a maximum of £3,000, meaning savers will have to put away £12,000 over a four year period
- Accounts are not limited to one per household but per individual. Therefore , two people buying a property together can each have a HTB ISA
- Funds can be transferred from existing Cash ISAs; however, customers can still only subscribe to one Cash ISA provider in a tax year, unless your ISA provider is a portfolio provider
It is also worth noting that savers cannot take out a Help to Buy ISA if they have subscribed to a cash ISA in the same tax year, unless your ISA provider is a portfolio provider, but can if they have subscribed to a stocks and shares ISA only (subject to the maximum annual subscription)