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Published on April 5th, 2014 | by Pete

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New vs. Old ISAs – What’s the Difference?

The 2014 budget was recently announced, and this time round there was an interesting development in relation to ISAs. The Government has introduced a new scheme for savers, called the ‘New Individual Savings Account’, or ‘NISA’. This sounds remarkably like an ISA I hear you cry, so what exactly is the difference between the two accounts?

The headline is that the NISA means that we can now save more every year, than we previously could with the old hat ISA. The annual ISA deposit amount was £5,760, whereas the new NISA deposit amount is £11,520, in either, cash, or stocks and shares. The changes have been welcomed by industry experts. Graham Beale, the chief executive of Nationwide stated that the ISA will: “reduce confusion on the differing amounts which could be saved in cash and stocks and shares, and more importantly give people more flexibility to earn tax-free interest.” Well, this all sounds smashing doesn’t it? So how do those new deposit options break down? From the 1st July you could choose to pay in:

•£15,000 to a Cash NISA and nothing to a Stocks and Shares NISA

•£15,000 to a Stocks and Shares NISA and nothing to a Cash NISA

•£5,000 to a Cash NISA and £10,000 to a Stocks and Shares NISA

•£10,000 to a Cash NISA and £5,000 to a Stocks and Shares NISA

•a combination of amounts between a Cash and Stocks and Shares NISA, up to the overall annual limit of £15,000

Here is a video that helps to explain the new product, in lovely clear, good old fashioned English:

It’s worth noting that you will not need to do anything if you have an ISA. Come July it will automatically become a NISA, which is excellent for me, as I’m a massive hassle avoider. According to the Government, more than six million savers will benefit from the NISA, Are you one of the six million?

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