A New ISA – now wouldn’t that be lovely

The information provided in this article was accurate at the time of publishing and should be read in the context of the date it was published. Views in this article are those of the author alone and do not necessarily represent the view of Scottish Friendly.

My favourite song from the classic musical “My Fair Lady” is at its start.  Lowly flower girl Eliza Doolittle is feeling rather glum about her impoverished situation in the cold environs of a Victorian Covent Garden.  However it’s not long before her fellow Cockneys rally together to cheer her up.

“The missus wants to open up the castle in Capri” sings a chipper fellow Covent Garden worker.  “Me doctor recommends a quiet summer by the sea” follows from one chubby elderly flower lady.

The song of course is “Wouldn’t it be Loverly”.  Yes, it’s nice to dream about what we could do with loads of lolly – and it’s this song title that springs to mind when I see all the headlines that are springing up to herald the New ISA allowance that begins on 1 July.

The focus of the headlines tends to be the fact that from 1 July the annual ISA limit is being increased to £15,000.  Well, “wouldn’t that be abso-bloomin’-lutely loverly” to paraphrase from the song!

The fact is that very few of us (around just 14%) ever used the previous stocks and shares (or investment) ISA allowance and so even fewer use our full ISA allowance.

The current ISA allowance is £11,880 so even before the limit goes up to £15,000, how many of us have this amount of money to invest each year.   Not a lot!

That’s why at Scottish Friendly our focus for ISAs and the New ISA has been not on the “wealthy and well-advised” but on the majority of people for whom the thought of investing £15,000 a year is nothing but a pipe dream.

We’re excited about the New ISA not because it allows a small proportion of investors to invest up to £15,000 a year but because it’s a clear signal from the Government of their commitment to ISAs.

We also welcome the fact that the ISA regulations have been simplified to make ISAs more flexible. Check out what New ISAs are all about from our handy guide.

ISAs are for everyone – even Eliza Doolittle!

Tax rules can change and depend on individual circumstances. Tax-free means free of income and capital gains tax (other than tax on dividends from UK shares in the case of stocks and shares investments). The value of stocks and shares investments can fall as well as rise and you could get back less than you have paid in.

No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a savings or investment 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.