ISA allowances currently let savers invest up to £20,000 into accounts throughout the tax year. The new tax year will start from April 6 and any ISA allowance not used, along with the corresponding tax perks, will be lost.
This may be a particularly stressful thought for many at the moment as coronavirus continues to impact the economy.
Indeed, new research, conducted by OpenMoney in conjunction with YouGov earlier this month among 2,005 British adults, found that just a quarter (24 percent) of respondents said they are able to put some money into savings every time they got paid, while half (52 percent) only did so sometimes, rarely or never.
Additionally, while 55 percent were keeping up with all their bills and credit commitments without difficulty, 35 percent detailed they were struggling with household expenses at least some of the time.
Within the group not saving regularly, over half (56 percent) admitted to struggling with their bills at least some of the time, although more than a third (37 percent) were keeping up with them without any difficulty.
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“For many, £50 a month could be achievable and can add up to nearly £19,500 after 20 years, with the £12,000 you put in generating almost £7,500 in returns. This could go a long way towards improving your future financial resilience.”
With the tax year deadline approaching, OpenMoney urged people to remember that they can invest in an ISA at any time of the year.
For those worrying about reaching the £20,000 limit, it should be noted that few actually hit the maximum and as such, they should not be dismayed.
In analysing HMRCs own figures, OpenMoney revealed that since 2017, people paying into an ISA have deposited between £6,000 and £6,500 on average per year.
As such, OpenMoney detailed there’s no need for “most of us” to stress about meeting the april 5 tax year deadline or panic about “use it, or lose it” messaging.
Anthony concluded with the following advice: ” While it’s great to be reminded to take advantage of your tax-free allowances, the majority don’t get anywhere near maxing out their ISA each year, so the end of tax year ISA deadline isn’t something most people need to worry about.
“If you’re not ready to invest in an ISA before 5th April, don’t panic.
“Another £20,000 ISA allowance starts from 6th April, so look at investing during that tax year instead.
“If you are unsure whether investing in an ISA is right for you, speaking to a financial adviser can help you decide if it’s the best choice for your money.”
New ISAs can be opened soon and the £20,000 limit can be spread across the four main types of account, which includes cash, stocks and shares, innovative finance and Lifetime ISAs.
For cash ISAs account holders must be at least 16, with all other ISAs having a minimum age of 18.
There are many different types of ISAs which offer differing interest rates and features and the accounts can be opened with any of the following:
- Building societies
- Credit unions
- Friendly societies
- Stock brokers
- Peer-to-peer lending services
- Crowdfunding companies
- Other financial institutions
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