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Savings Plan
Summary
School Fee Planning Early financial planning is very important for those who wish to help fund for their children's education. The sooner you're able to start saving, the greater the opportunity for your mony to grow. Saving plans can be tailored to meet your requirements making use of tax efficient saving vehicles where possible.
Individual Savings Accounts Saving in an ISA means you do not have to pay any further tax on the income received within the ISA. You can save up to £10,200 each tax year. The full £10,200 can be invested in a stocks and shares ISA with one provider or up to £5,100 can be saved in a cash ISA with one provider, with the remaining being saved in a stocks and shares ISA with either the same, or another provider.
From 6 April 2011 the ISA limits will be increased in line with the Retail Prices Index on an annual basis.
There are two types of ISA:
·Cash
·Stocks and Shares
You can save in two separate ISAs in any one tax year: one cash ISA and one stocks and shares ISA. You cannot save in more than one cash ISA or more than one stocks and shares ISA in the same tax year.
The benefits of ISA’s:
·No further tax is payable on the income received from ISA savings and investments. However, any UK dividend income received within a stocks and shares ISA will be subject to a 10 per cent tax credit - this is not Income Tax and is not repayable.
·No tax is payable on capital gains arising on investments.
·Money can be taken out at any time (but some accounts have a notice period).
·The ISA does not have to be reported on a personal tax return.
Maximum Investment Plans This is a form of endowment plan which is made up of minimal life assurance and a savings plan. It has a term which will usually mature after ten years, although there may be an optional facility to remain invested after this date.
Friendly Society Bonds Friendly societies offer endowment policies where contributions of up to £25 per month or £270 per annum can be invested into tax-exempt funds.
This summary in no way constitutes the complete explanation of savings plans or how they may suit you. For further details of savings plans and how these may help your personal circumstances please seek independent advice.
