Monthly archive for June, 2014
From 1st July ISA rules are changing, one of the most important being that UK savers will be able to put up to £15,000 into an ISA. So with only a week to go until these new ISA rules take effect, now is a good opportunity to review the performance of any existing ISAs you might have, as well as consider options for further investment. For those who want to take advantage of this increased allowance and start protecting their returns from the taxman straight away, our head of savings and investment, Oliver Roylance-Smith, has selected his top 5 investment plans for the New ISA.
New ISA changes in a nutshell
From 1st July 2014, the key changes to ISAs are as follows:
- All existing ISAs become New ISAs
- New ISA allowance of £15,000
- Allocate up to the full allowance in either cash or stocks & shares (investments), or a mixture of both
- Freedom to transfer from cash to stocks & shares and vice versa (Stocks & Shares ISA to Cash ISA previously not permitted)
What is an ISA?
Individual Savings Accounts (ISAs) are a tax-efficient wrapper for your money – they offer a way of saving and investing without paying any tax on the returns you make, whether this is income or capital gains. ISAs are changing significantly on 1st July 2014 – read on to find out what these changes mean for you and your savings.
Who are ISAs for?
ISAs are available to UK residents over 16. Each person has their own ISA allowance for each tax year, and once it’s gone, it’s gone, so it makes sense to maximise the tax-reduction properties of ISAs while you can. ISAs should be your first savings port of call in order to avoid paying tax unnecessarily on your investments.
What is the New ISA?
In the recent Budget the Chancellor promised to increase the ‘simplicity, flexibility and generosity’ of ISAs. As a result, there will now be a single ISA which has been named the new ISA (or ‘NISA’) which gives you a bigger tax break than ever before and more flexibility about how you can use them.
If you are looking for a fixed rate savings deal in June 2014, there are alternatives to traditional fixed rate bonds, such as structured deposit plans, which could be an option for those who would normally have chosen to lock their cash away for a fixed term. See below for our selection of some of the best fixed rate bonds and alternative savings plans on the market in June 2014.*
Short term fixed rate bonds
One year fixed rate bonds are more plentiful than in recent months, with the Post Office 1 Year Online Bond leading our selection with an interest rate of 1.61% AER/gross. The deposit for this account is set at £500 minimum and both annual and monthly interest options are available. The account is online-only and no further withdrawals or deposits are allowed after the beginning of the term. A similar rate of 1.60% AER is available from Aldermore with the 1 Year Fixed Rate Bond, with a minimum opening balance of £1,000 and online-only account operation.
Those with a lower deposit, who still want to take advantage of a short term fixed rate bond, may want to take a look at the Virgin Money 1 Year Fixed Rate e-Bond, which pays 1.55% AER/gross on balances from £1 – £1,000,000. With the option of monthly or annual interest, this could be a fixed rate to consider for many savers.
Fair Investment Company is committed to helping charities overcome the obstacles that they frequently face when it comes to getting a good interest rate on their savings. To help you choose the best charity savings account, take a look at our selection of the best charity savings deals for June 2014.*
Latest charity notice account deals
An easy access charity savings account could be a suitable option if you are looking for flexible access to your charity funds. The Scottish Widows Charity Deposit Account offers instant access with no withdrawal penalties. The account requires a minimum deposit of £500 and allows a maximum balance of £5,000,000 with an interest rate of up to 0.40% gross/AER.
If you are prepared to give 60 days’ notice on withdrawals you may be able to get better give some notice of withdrawal, the Cater Allen Asset 30 account offers a rate of 0.65% gross/AER with a notice period of 30 days. The minimum deposit for this account in £5,000, with monthly interest payments, and deposits are guaranteed by Santander.
Are your business savings working as hard as they could be? If not, it may be time to reassess whether your current business savings plan is still suitable for your circumstances. Read on for our selection of some of the latest business savings accounts in June 2014 to help you choose the right option for your company.*
Latest short term business savings account deals
If you are prepared to put your business savings away subject to 95 days’ notice for withdrawals, you could benefit from an interest rate of up to 1.36% AER/gross with the Bank of Cyprus 95 Day Notice Account. Interest on this account is calculated daily and it paid into the account each month. The account can be opened with a relatively low minimum of £1,000
For those who want easier access to their business savings, the Asset 30 account from Cater Allen permits withdrawals subject to 30 days’ notice. The account pays monthly interest at a rate of 0.65% AER/gross.
For the quickest access of all, you may want to opt for the Aldermore Easy Access Account, which pays interest of 1.00% gross/AER on balances from £1,000 up to £1,000,000. You can make unlimited withdrawals online, free of charge, from this account.
Neil Woodford spent 25 years at Invesco Perpetual looking after more than £30bn of assets and is arguably the best known UK fund manager of the last decade, which is why this has been one of the most eagerly anticipated fund launches in UK fund management history. The CF Woodford Equity Income Fund launched on 2nd June 2014 and is now open for investment through the Fair Investment Fund Supermarket at 0% initial charge and. The fund is available for this year’s ISA allowance and we also accept ISA transfers. Investors who have already used their ISA allowance can invest via our investment account. If you’re ready to invest, then request an application pack or apply online.
Neil Woodford – one of Britain’s finest
Neil Woodford is one of the UK’s best known fund managers and his performance whilst at Invesco Perpetual makes him one of the most successful fund managers of recent times. So when the news that he was leaving Invesco hit the headlines back in October last year, it was understandable why many investors took note.
The CF Woodford Equity Income Fund – available now
Now he is back with the first fund from his new venture, the CF Woodford Equity Income fund, which will have the same investment approach he employed at Invesco Perpetual, targeting capital growth and a level of income. Mr Woodford said “I will run this new fund in the same way that I have always run money, adopting the same philosophy and the same long-term approach. My passion and energy have never been stronger.” The fund is available now for investment via the Fair Investment Fund Supermarket as a new ISA, ISA transfer or non-ISA investment.
Structured deposits have experienced a rapid rise in popularity on the back of a sustained period of record low interest rates and falling savings rates. Fixed rates are under pressure and with the continued uncertainty around inflation and the cost of living often rising faster than the increase in workers and pensioner’s earnings, many savers are turning to investing in order to try and meet the increasing demands from their capital. But there is a middle ground that does not put your capital at risk – the structured deposit. So that you may better understand this alternative product range and to help you find out whether they could compliment the other savings you have, we have put together our Savers Guide to Structured Deposits.
Savings rates reality
The mainstay of many a saver’s portfolio has historically been the fixed rate bond. However, rates here have been under continued pressure as banks have been able to secure cheap funding by alternative means. This means long gone are the days where committing your money for longer was all you needed to secure a high return that also had the potential to outstrip inflation. With many maturing fixed rate bondholders facing significant falls in the yields available, longer term fixed rates are in many cases failing to meet the needs of savers.
In addition to investing some of this capital to try and make it work harder, at the other end of the risk spectrum this has also resulted in a worrying trend of many savers shoring up more money than they normally would in instant access accounts. With many of these failing to offer rates anywhere close to inflation, savers are losing money in real terms – and that’s before the impact of tax is taken into account. So savers continue to face the toughest of decisions – either lose money in real terms from a savings account or take on more risk – and it is against this savings rates reality that the structured deposit has risen in popularity.