Monthly archive for March, 2014

Last Minute Investment ISAs – Our Top 5

Written by Tags: , , , , , , , , ,

With less than a week to go until the deadline for using your 2013/14 Investment ISA allowance (£11,520), this is your last opportunity to protect your returns from the taxman. If you are yet to make use of this valuable tax break, we let you know where investors are putting their money by bringing you our Top 5 most popular Investment ISA plans.

Conditional capital protection

These plans offer some protection of capital against a falling market since they all include conditional capital protection. This means that your initial capital is returned at the end of the investment term, as long as the FTSE has not fallen below a specific level (e.g. 3,900 points) or a percentage, normally 50% of its value at the start of the investment.

Your capital will be at risk if the Index does fall below the defined level, in which case your initial capital will be reduced by 1% for each 1% fall and so you could lose some or all of your initial investment.

1. 6% fixed income each year, monthly payments

Top of the list is the Enhanced Income Plan from Investec which pays a fixed income of 6% per year (paid as 0.5% each month) regardless of what happens to the FTSE. Capital is at risk if the FTSE falls by more than 50%.
Click here for more information »

2. 9.5% each year even if the FTSE only rises 1 point

Investec also offer our most popular growth plan with their Enhanced Kick Out offering the potential to mature early and return 9.5% for each year the plan has been in place (not compounded). The plan has a maximum term of six years but will mature early if the FTSE at the end of each year is higher than its value at the start of the plan, from the end of year one onwards. Capital is at risk if the FTSE falls by more than 50%.
Click here for more information »
Read more

Last Minute Cash ISAs – Our Top 5

Written by Tags: , , , , ,

Time is running out to meet the 5th April end of tax year deadline and so this is your last opportunity to protect your 2013/14 Cash ISA allowance (£5,760) from the taxman. To help you know where our customers are putting their money, we feature our Top 5 most popular Cash ISA plans.

Capital protected

All of the deposit plans below are fully capital protected and eligible for FSCS protection up to the normal deposit limits.

1. The potential for 4.85% annual income

The Target Income Deposit Plan from Investec offers 4.85% each year provided the value of the FTSE 100 Index at the end of each year is higher than 90% of its value at the start of the plan (subject to averaging). If the Index finishes below 90%, no income will be paid although should it meet the required level on any future anniversary, any missed payments will be added back.
Click here for more information »

2. Potential 30% fixed return or any rise in the FTSE if higher

If the FTSE 100 Index finishes higher than its value at the start of the plan, even if this by just one point, the 5 Year Deposit Plus Plan from Investec will pay a 30% fixed return. If the FTSE has risen by more than 30% then you will receive this higher amount, with no upper limit (subject to averaging).
Click here for more information »
Read more

60 Second Guide to the Budget

Written by Tags: , , , , , , , , ,

With probably the most talked about Budget for many years and finally one that has gone the way of savers, we give you a 60 second guide to the changes around ISAs and what this will mean for both cash savers and investors.

New tax year, new limits

From 6th April 2014, the annual ISA investment limit for 2014/15 will initially rise by £360 to £11,880 (of which up to £5,940 may be in cash). The limit for the Junior ISA (JISA), which is beginning to attract more investors, will simultaneously rise to £3,840.

More radical reform

From 1st July 2014, more radical changes will occur:

  • All existing ISAs will become new ISAs (NISAs), removing the distinction between Cash and Stocks & Shares ISAs
  • The maximum you can save into a NISA will rise to £15,000 for the 2014/15 tax year, a further increase of £3,120
  • The rule which prevents more than 50% of the total limit being placed in a Cash ISA will be scrapped and so the entire £15,000 NISA contribution limit can go into cash deposits.
  • The ban on transfers from Stocks & Shares ISAs to Cash ISAs will be removed, thereby introducing full two-way transferability between deposits and investments and vice versa.
  • Investment options will be widened to include, for example, peer-to-peer lending.
  • The JISA limit will rise to £4,000 and this will also apply to Child Trust Funds (CTFs). The date from when CTFs can be transferred into JISAs was not brought forward and remains, provisionally, April 2015.

Read more

2014 Investment ISA Selections

Written by Tags: , , , , , , , , , , ,

With the 5th April end of tax year deadline close at hand, we bring you our selection of income and growth investment plans to help you decide how to best make use of this valuable tax break.

Defined Returns

These plans offer you a defined return for a defined level of risk, which means that you know the exact terms of the plan prior to investing and therefore exactly what needs to happen in order to provide you with the stated income or growth return.

Conditional capital protection

Unlike investment funds – where all of your capital moves in line with daily fluctuations in the market – these plans contain what is known as conditional capital protection. This means that you will receive a return of your capital at the end of the plan term unless the underlying investment, normally the FTSE 100 Index or a number of FTSE 100 shares, has fallen by more than 50% or finishes below a level specified at the outset, e.g. 3,900 points, in which case your capital would be at risk.

 

INCOME

6% fixed income, monthly payments

The Enhanced Income Plan from Investec was our most popular income investment in 2013 and continues to be a best seller. The main appeal of the plan is that it offers a fixed income which is paid to you each month, regardless of the performance of the FTSE 100 Index. The annual income is currently 6% (paid as 0.5% each month) which is high when compared to typical yields currently being paid by equity income funds. There are also no additional annual management charges so you know exactly how much you will receive, when and for how long. Capital is at risk if the FTSE drops by more than 50% during the plan and fails to recover by the end of the term, in which case your initial capital will be reduced by 1% for each 1% fall, so you could some or all of your initial investment.

Fair Investment view: “6% tax free income (if held in an ISA) is the equivalent of 7.5% taxable income for a basic rate tax payer and 10% for a higher rate tax payer. This high level of fixed income and the monthly payment frequency are popular features and with ongoing uncertainty around future interest rates and dividend yields, this plan could offer a competitive balance of risk versus reward that could be considered by both savers and investors”

Click here for more information »
Read more

2014 ISA Deadline Checklist

Written by Tags: , , ,

With such a vast range of options available for both Cash ISAs and Investment ISAs, it can be easy to lose track and with 5th April 2014 deadline fast approaching, we thought you might like some help. By answering the questions below we’ll help you keep on track and make sure you maximise the opportunities available with this valuable tax benefit.

Have I maximised my ISA allowance?

The Cash ISA allowance is £5,760 for the current tax year rising to £5,940 for the next tax year (2014/15) which starts on 6th April 2014. The Investment ISA allowance is £11,520 for the current tax year rising to £11,880 for the 20142/15 tax year.

Remember, even if you put the maximum into a Cash ISA, you are still able to invest up to £5,760 this tax year £5,940 in the next tax year into an Investment ISA. This is in addition to any existing ISAs you decide to transfer.

Has my partner maximised their ISA allowance?

Always remember that the ISA allowance is not just an annual allowance but is also per individual. This means that a couple maximising their Investment ISA allowance for both this current tax year as well as the next, have the opportunity to make new investments of up to £46,800 in total. To help you, many investment plans and Cash ISA alternatives are offering the option to take advantage of both years’ ISA allowances at the same time.
Read more

2014 Cash ISA Selections

Written by Tags: , ,

With time running out to meet the 5th April end of tax year deadline, we bring you our selection of the best Cash ISAs available.

Instant access

Our ISA season instant access selection is from Scottish Widows Bank, which is offering 1.00% AER on their E-Cash ISA. You do not have to be an existing customer to obtain this rate nor open any other type of account as a condition. You can make unlimited withdrawals – without notice or loss of interest – and the account accepts Cash ISA transfers. The minimum to open the account is reasonably low at £1,000 and there is choice of biannual or annual interest.

Traditional fixed rates

In the shorter term you can get 1.60% with the 1 Year Fixed Rate Bond from Aldermore or 1.80% AER for a 2 Year Fixed Rate Bond, again from Aldermore. Both accounts have a minimum of £1,000, accept transfers in from existing Cash ISAs and can be managed online, by phone or by post.

With the approach of the end of the tax year, banks and building societies traditionally launch new accounts to attract savers but there has been a noticeable lack of new accounts this year. This has particularly effected the fixed rate market resulting in there being very little on offer in the way of longer term fixed rate Cash ISAs.

Concerned about interest rates and inflation?

Many of those considering traditional savings plans are likely to be considering instant access or a one or two year fixed rate bond, especially considering the lack of competitive longer term deals. However, although the above rates are competitive, remember that with inflation running at 1.9%, even though you do not pay any tax on your interest they are still falling short. If inflation should move up from its current levels during your fixed rate period, the impact will be even greater.

When unveiling its quarterly inflation report last month (Feb 2014) the Bank of England stated that interest rates will remain at their record low ‘for some time to come’ with the base rate potentially rising to 2% by 2017. The Bank added that interest rates will probably never reach pre-recession levels of around 5% even after the economy fully recovers, commenting that the ‘new normal’ was likely to be 2% to 3%. Since there is also no guarantee that any rate increase will be passed on to the savings rates on offer, perhaps you should indeed be concerned about the rate you are receiving and the impact inflation could have on your savings.
Read more

Top 3 income investment ISAs

Written by Tags: , , , ,

With only a month to go, time is running out to maximise the valuable tax benefit of your ISA allowance before the deadline on 5th April 2014 – otherwise it is gone forever. The ISA allowance for the current tax year is £11,520 and up to half can be placed in a Cash ISA. For those looking to use some or all of this allowance, or perhaps transfer existing Cash ISAs or Investment ISAs, our head of savings and investment, Oliver Roylance-Smith, selects his top 3 income investments for this ISA season.

Top 3 selections

Our selection of income investments is based on the main features investors usually look for when it comes to finding the best income opportunities available, from high levels of income to regular payment frequencies. Our selections include a high yield investment offering up to 9% income, a unique fixed income investment offering 6% each year, paid to you whatever happens to the stock market, and a fixed term plan offering 7.2% income provided the FTSE remains above 3,900 points.

Income a top priority

With cash offering record low rates, even if you tie yourself in for the longer term, many savers are being forced to join income investors in the hunt for higher yields. Many income investors have historically looked to funds or an investment portfolio to provide an income, but with typical yields on UK equity income funds currently under 4%, this may not be providing the level of income required and investors will be questioning whether capital growth will do enough to boost their overall returns.

Defined return, defined risk

This is why we choose to feature fixed term investments, which offer a defined return for a defined level of risk, with conditional capital protection one of the main appeals. Rather than having your capital exposed to day to day stock market risk, these plans will return your initial capital at the end of the term unless the FTSE has fallen by more than 50%, or finishes below a level specified at the outset, e.g. 3,900 points, in which case your capital will be at risk. Investors can then decide based on the likelihood of this happening in combination with the income on offer.
Read more

Top 5 growth investment ISAs

Written by Tags: , , , ,

With only a month to go, time is running out to maximise the valuable tax benefit of your ISA allowance before the deadline on 5th April 2014 – otherwise it is gone forever. The ISA allowance for the current tax year is £11,520 and up to half can be placed in a Cash ISA. For those looking to use some or all of this allowance, or perhaps transfer existing Cash ISAs or Investment ISAs, our head of savings and investment, Oliver Roylance-Smith, selects his top 5 growth investments for this ISA season.

High growth opportunities

Investors looking to gain a broad exposure to the UK stock market often look to investments linked to the performance of the FTSE 100 Index. But with the FTSE 100 at its current levels, investors considering their options are often split down the middle – on the one side are those who feel confident that the Index can break through the 7,000 point barrier for the first time and keep going, and then there are those who remain uncertain that the market can continue to rise.

Top 5 selections

With this in mind, our selection of growth investments encompass a range of views and offer opportunities whether you think the market will stay relatively flat, go up over time, and plans that will produce investment level returns even if the market goes down – so there should be something for all investors to think about. With potential returns of up to 12.5% there are some high headline returns on offer, some of which could be realised as early as year one of the investment.
Read more

5 good reasons to use your ISA allowance

Written by Tags: , , ,

With the end of the tax year only a month away, making sure you use your ISA allowance should be a top priority. But if you are wondering why you need to consider your ISA options or what all the fuss is about, we offer you a helping hand by giving you 5 good reasons to use you ISA allowance.

The allowance is waiting…

At the start of each financial year, HMRC set a limit on the amount each individual can put into an ISA over the course of the next twelve months – known as the ISA allowance. You can either invest your full allowance in an Investment ISA (sometimes called a Stocks and Shares ISA), or put up to half in a Cash ISA and the rest in an Investment ISA. This year’s allowance is £11,520, which means you can put up to £5,760 into a Cash ISA.

But why should you use your ISA allowance? The current economic climate is seeing record low savings rates and so Cash ISA savers might not have seen anything that appeals, or perhaps you feel like it’s not really relevant to you because you already have a different type of savings or investment plan. To this end our Head of Savings and Investment, Oliver Roylance-Smith, gives you 5 reasons why you should consider using your ISA allowance and use it now.
Read more