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Wealth Management News

Latest News
02 Jul 2014

New ISA Rules And What You Need To Know

New rules governing individual savings accounts (ISAs) came into force on the 1st of July, turning all existing accounts into New ISAs (NISAs). Under the new rules, savers have the option to save more money tax-free, and can choose between saving hard cash or making investments.

According to statistics quoted by BBC News, around 50% of the UK adult population - roughly 23 million people - currently have an ISA. As of the beginning of this month, all of these accounts automatically became NISAs. With their new accounts, customers are now able to save up to £15,000 and can set up any combination of cash and stock and shares, BBC News reported.

In addition, the new rules allow savers to transfer money from stocks and shares accounts to cash accounts – although some providers may forbid partial transfers, the news service explained. Individuals aged between 16 and 18 years old are not allowed to hold a stocks and shares account, but the good news is that the limit for Junior ISAs has increased to £4,000 a year.

The rules also state that when a NISA has been topped up to £15,000, customers are prohibited from opening an additional one.

Some experts are warning savers to be cautious. A number of providers are offering low returns, therefore savers should shop around for the most favourable NISA offer by comparing those from a range of different providers.

According to the British Bankers´ Association, UK banks were ready for the impact of the new rules. Members have already implemented plans to cope with an expected increase in the number of transfers, and staff have been trained in preparation, the BBC reported.

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