WHO WANTS TO BE AN ‘ISA MILLIONAIRE’?

TODAY’S BLOG

WHO WANTS TO BE AN ‘ISA MILLIONAIRE’?

Tax-free savings accounts have been ‘a thing’ since the introduction of PEPs in 1986.

In 1990 TESSAs were born, with ISAs appearing for the first time in 1999.

So for the last 36 years, it has been possible (and encouraged) to save tax-free up to certain limits.

As you are probably aware the current limit for ISAs is £20,000 per tax year.

There was an article in the news recently saying that HMRC has confirmed that there are now more than 2,000 ‘ISA Millionaires’ in the UK.

The first ever ISA Millionaire is thought to be Lord Lee of Trafford.  He hit the £1,000,000 mark in 2003 (sixteen years after investing his first £1).  He invested the full amounts allowed each year into stocks and shares accounts (totalling £126,000).  All interest and dividends were invested back into his portfolio and the power of compounding is clearly demonstrated here (with growth in the sum of just under £900,000 to hit that magical £1million).

There is no Capital Gains Tax to be paid on it and no Income Tax on the dividends either.  It IS what it ‘says on the tin’ … completely tax-free.

It has been calculated that investors putting in their first £1 today could become ISA millionaires in approximately 22 years (depending on returns) – and that’s if the annual allowance remains at £20,000!

So when you hear any of us on the Team at Solomon’s ‘reminding’ and ‘gently nudging’ you about making annual ISA contributions (or better still – setting up a monthly Direct Debit!) – there is a very good reason for this.

We encourage all our clients to save regularly in this way and maximise the allowances whenever possible – and so this is yet another timely reminder from us that if you want to use your allowance for the 21/22 tax year – you must do so very soon – time is running out – and it’s a case of ‘use it or lose it’.

Please let us know urgently if you are intending on making a contribution to your ISA in the 21/22 tax year, so that we can make sure this is processed within the deadlines.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

WHO WANTS TO BE AN ‘ISA MILLIONAIRE’?2024-02-08T16:46:07+00:00

Cash ISA latest rates

Latest Cash ISA Rates

There continues to be the expected speculation about inflation and interest rates – how on earth would the media use their time if they didn’t spend so much of it guessing the future?  As we know, official inflation rates are falling, yet you and I probably pay more for the things we actually consume, strange but true. Anyway, here are some of the top rates currently available. Please note that this is simply a list, it is not advice. It is important to ensure that your funds are ideally within FSCS compensation limits and not restricted due to shared banking licenses.

Instant Access Accounts

  • On-line: Melton Mowbray 2.50%
  • Bank: Virgin Money 2.20%
  • Building Society: 2.35%

Cash ISA – Variable Rates

  • On-line: Sainsbury’s Bank 2.80%
  • Bank: Virgin Money 2.40%
  • Building Society: Earl Shilton 2.70% (90 day notice)

Cash ISA – Fixed Rates

  • On-line: Bank of Cyprus UK 3.20% (3 years)
  • Bank: Halifax 3.60% (5 years)
  • Building Society: Yorkshire 3.20% (fixed until 31 May 2014)

I have to admit that I’m not overly comfortable with a society that has supermarkets offering banking services, which probably says more about Banks than it does about supermarkets. However many people visit their supermarket more than they visit their bank. I have to admit that I prefer to visit neither and am rather an advocate of on-line service.

New ISA Allowance for 2013/14

You may wish to know that the ISA allowance is now linked to inflation and the September figure for inflation (2.20%) is used for the following tax year. So the 2013/14 ISA allowance will be £240 more. As a result the full 2013/14 allowance will be £11,520 with up to half this into a Cash ISA (£5,760).

Cash ISA latest rates2023-12-01T12:23:04+00:00
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