Make the most of your tax-free allowance
The world of tax-free allowances may seem tricky, but Scottish Friendly is here to help you navigate the monetary maze — and get the most from your investments for both you and your family.
The UK Government lets you put a certain amount of your money into ISAs and Junior ISAs every year tax-free — but even if you reach this limit, you can still invest additional cash in a tax-exempt savings plan (TESP) with a mutual like Scottish Friendly.
The value of TESPs from Scottish Friendly like all investments can fall as well as rise and you could get back less than you have paid in. Tax-free means the fund your plan invests in grows free of income and capital gains tax (other than tax on dividends from UK shares) and tax treatment depends on your individual circumstances and tax law may change in the future.
A Tax-Exempt Savings Plan — called a TESP for short — can be another tax efficient way of building up a lump sum for your family.
Under current Government rules, during the 2016/2017 tax year you can put a maximum of £25 a month or £270 a year into a TESP, which also includes a small amount of life cover.
So even if you've reached your ISA allowance, you can still continue to beat the taxman and invest towards your family's future by putting cash away in a TESP.
Individual Savings Accounts are another way to build a tax-free lump sum, and under current Government rules, you can use them to put away a maximum of £15,240, in tax year 2016/2017.
You can put the full amount into a Stocks and Shares ISA, a Cash ISA or (from 6 April) an Innovative Finance ISA. Alternatively, you can split the allowance between all three types. Find out more in our ISA Allowances section.
Junior ISA allowance
As well as TESPs and ISAs, Junior ISAs are a tax-free way to invest for children who were not eligible for a Child Trust Fund (provided they are resident in the UK).
These work just like regular grown-ups ISAs, with a choice of Cash Junior ISAs and Stocks and Shares Junior ISAs. The current rules mean you can put £4,080 into a Junior ISA, in tax year 2016/2017. Find out more in Junior ISA Rules.
No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting www.unbiased.co.uk. Advisers may charge for providing such advice and should confirm any cost beforehand.