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Alexander Financial Services - Savings

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Individual Savings Accounts

How much can be invested?

Over the years since their inception, ISAs have become gradually less complex. Each tax year everyone over the age of 16 for cash ISAs or 18 for stocks & shares ISAs, has an ISA 'allowance' which sets the maximum that can be saved within the tax-free wrapper from April to April.

The current limit is £10,680, up to £5,340 of which can be in the form of cash.Yet the whole chunk could be used for shares if you wish.

There are three basic scenarios:

  1. Using the maximum cash allowance. You can put £5,340 into a cash ISA, leaving £5,340 available to fill with shares (though you obviously aren't obliged to use this).
  2. Use it all for shares. You are allowed to invest in £10,680 worth of shares. However this leaves no room for tax-free cash savings.
  3. Mix n' Match. Some amount under £5,340 can be saved in cash, then the rest of your £10,680 allowance put in a shares ISA. For example, someone saving £2,000 in a cash ISA has £8,680 left to invest in shares.

Junior Individual Savings Accounts

Junior ISAs are long-term tax-free savings accounts for children.

Your child can have a Junior ISA if they:

  • Are under 18
  • Live in the UK
  • Do not already have a Child Trust Fund account

Each child can have one cash and one ‘stocks and shares’ Junior ISA at any one time.

Anybody can put money into a Junior ISA. The total limit for payments into Junior ISAs is £3,600 in each tax year. There will be no tax to pay on any interest or gains.
The money in a Junior ISA belongs to the child, but they can’t take the money out until they are 18. They can then decide what they want to do with it. If the child chooses not to take the money out, the Junior ISA will automatically become an ISA.