Five questions about: ISA limits

 

Is this about the proposals to limit the amount of cash you can keep in a tax-free ISA?

No. That's just speculation. According to some reports the Treasury is considering putting a cap on the amount of savings you can shelter from tax in an individual savings account.

What would the limit be?

It could be as low as £100,000, according to one report. But if it did happen, it's more likely to be much higher ‑ a million, for instance, to stop the accusations that the government is allowing the ultra-wealthy another tax-break.

What's the current limit?

There's none. It means, in theory, that anyone who opened a personal equity plan - the forerunner of the ISA - back in 1987 and put in the maximum allowed each year, could easily be sitting on more than a million now.

But isn't there an annual limit?

Yes there is. It currently stands at £11,520 but is likely to rise to £11,880 next April.

That sounds an odd amount. Why £11,880?

Because ISA limits climb in line with inflation and, specifically, September's cost-of-living rise of 2.7 per cent. The Chancellor will confirm new ISA limits in his Autumn Statement in December.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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