The new NISA at first glance look like they will be great news.
Let’s start with the obvious – a single simple cap of £15,000 a year into your ISA with no restrictions on how you invest it. Talk about setting the people free!
The new regime will preserve the concept of a client being entitled to two ISAs (sorry NISAs – that is going to take some getting used to). This means that you will be able to hold a Cash NISA (which can unsurprisingly only hold Cash) and a Stocks & Shares NISA (which confusingly can hold largely anything including cash). Where your provider mixes the two it looks like they are called combined NISAs (at least that’s easy enough to understand).
In effect this means that you can have one NISA which will be for short term instant access money and a second NISA which will be for longer term riskier investments.
For a bit more flexibility you can also transfer assets between each of the NISAs whenever you want. But you’ll need to be careful as you can’t cash in and then pay in, you’ll need to follow a specific process so you don’t effect a withdrawal from your NISA. This should be easy enough to do.
The recent product developments within Scottish Friendly will set us up well for this. For example we’re already starting work on My NISA which will be a combined or Stocks and Shares NISA but with multiple policies within them that will allow you to plan your finances more effectively as well as making the most out of your new increased allowance of £15,000.
So at second glance they look even better! Well done George! It does leave me questioning why any basic rate taxpayer would now use a pension…. But more of that another day!
Stock market investments can go down as well as up and you could get back less than you have paid in.