Time is running out if you want to make the most of your tax-efficient savings allowance

If you are keen to take advantage of the New Individual Savings Account (NISA) allowance, now increased to £15,000, and make the most of your tax-efficient savings, time is running out. You only have until 5 April to fully utilise your 2014/15 NISA allowance, after which it will be lost forever.

 

In his 2014 Budget speech the Chancellor, George Osborne, announced that from 1 July last year ISAs would be reformed into a much simpler product, the NISA. Furthermore, all existing ISAs would be automatically converted to a NISA.

From 1 July 2014 the overall subscription limit set by the Government for 2014/15 increased from £11,880 to £15,000. It is now possible for new subscriptions to be split in any proportion between a new Cash NISA and new Stocks & Shares NISA. Therefore, you now have more choice about where to put your money: invest it all in a Cash NISA, split it however you want between a Cash NISA and Stocks & Shares NISA, or invest the full subscription allowance in a Stocks & Shares NISA.

Increased flexibility in the way you use your NISA allowance

You can:

Invest the full £15,000 in a Stocks & Shares NISA

Invest the full £15,000 in a Cash NISA

Invest any combination of amounts between a Stocks & Shares NISA and a Cash NISA up to the new £15,000 limit

A NISA way to wealth creation

Any contributions made into a NISA from 6 April 2014 will count against your new NISA limit for 2014/15. If you already have a Cash or Stocks & Shares ISA, your existing ISA will have become a New ISA and your annual limit increased to £15,000 for 2014/15.

Junior NISA limits also increased to £4,000 from 1 July last year. So again, if you have any unused allowance for this year, you will be able to top-up contributions before 6 April.

Transferring NISAs

You can still transfer NISAs from one provider to another if you are looking to consolidate your investments, or want to transfer between Cash NISAs and Stocks & Shares NISAs. The new NISA rules give you total flexibility to do this. Transferring previous tax year ISAs to a new provider does not count as another NISA contribution, so if you have built up a number of ISAs with several providers over the years, bringing them together under one roof will enable you to gain control and ensure they keep working in line with your objectives and risk appetite.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE. THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED. PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE.