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An ISA is a financial tool that allows you to legally avoid tax that would usually be paid on your savings and investments. In effect, a proportion of your money can be placed within an ISA each year, allowing you to opt out of paying tax on that element of your finances.
As you accrue interest, or make gains from your investments, you’ll find that you can keep all of the profits. There’s no need to make any sort of declaration referring to this income.
If you’re thinking about getting an ISA, then it’s worth knowing that they are provided in a couple of different formats. There are clear limits on how much you are able to legally invest within an individual tax year and these limits are known as your allowances.
The first type is what is known as a cash ISA. This is a type of financial product that is available to all UK residents, as long as they are aged 16 and over. Your maximum individual allowance for the current tax year (up to 5 April 2013) is £5,640.
Although you are only able to invest into one cash ISA each year, it is possible to carry your previous savings over on an annual basis. What this means is that you’ll be able to keep adding to the ISA. As a result, it’s actually possible to build up a substantial level of investment over time.
It is also possible to transfer your ISA savings, old and new, from provider to provider. This allows you to maintain the best rates, which rarely last longer than a year for variable rate ISAs. See more in our guide
You may prefer the idea of investing in a Stocks and Shares ISA, which is available to UK residents over the age of 18.
Investing money in a Stocks and Shares ISA means that you are effectively investing in the stock market. Any gains that you make as a result of this investment will not be liable for tax. Hence, this can represent a highly cost-effective approach to investing.
The total ISA allowance in 2012/2013 is £11,280 and though only half of this allowance can be invested in cash, you are able to invest that entire sum in a Stocks and Shares ISA. You’ll also find that there is plenty of flexibility within the system.
You might choose, as a result, to save some money into a cash ISA, with the remaining element of your allowance being invested in a Stocks and Shares ISA. You don’t have to use your full allowance.
It’s important to remember, however, that unused allowances do not roll over into the following tax year. In effect, they are lost for good.
Many cash ISAs, in particular, will allow you to get access to your money without the need to give much notice. This means that you can treat them in a similar way to a savings account, with the added benefit of tax-efficiency.
Despite the age limits that are in place getting an ISA, it is possible for parents or guardians to open a Junior ISA for children aged 17 or under. The current annual allowance for a Junior ISA is £3,600, although no money can be withdrawn until the child reaches the age of 18.
In order to ensure that you have the most tax-efficient approach to savings and investments, it makes sense to understand ISAs and the allowances that apply to you.
This is a guest post for Which4U provided in association with iCrossing Ltd.
Given the current economic climate, it’s more important than ever for small businesses to find ways to save money and stay competitive. Keeping costs down, maximising opportunities and monitoring expenditure are all essential to survival.
One route to achieving these aims is in establishing cheaper lines of communication with clients, customers and suppliers. Our money-saving communication tips feature below.
Some people still shy away from building their own website in fear of the cost and the technical demands. However, a website is now a vital tool for a small business and it’s not too challenging to build a site that is easy to manage.
Websites are a business card and business pitch in one: they allow you to promote, market, and sell a company’s features and benefits to a worldwide audience and establish an easy line of communication with potential contacts.
Keeping the content fresh shows that a site is current, relevant, and part of a dynamic business. Adding content also boosts search-engine rankings, which, in turn, drives more traffic and more custom.
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The decision of five major energy providers to increase prices before the close of the year is drawing attention to the energy and cost efficiency of UK businesses. The Business Energy Barometer commissioned by Business Juice collates statistics from 500 people responsible for energy in the workplace to find out their approach to energy.
The latest barometer discovered the following:
- That the majority of businesses switched their energy supplier in the last 12 months (61%).
- Over half are planning to switch again within 12 months.
- Businesses citing lack of time or motivation to switch could be costing a collective £867 million.
Knowledge (and the Lack)
Those who have switched within the last 12 months have certainly recognised the difference (the average saving for switching electricity suppliers is £868 in 2012). Almost two thirds of them (62%) plan to switch again in the next year.
But the barometer also revealed a surprising lack of knowledge. Stunningly, 4% aren’t sure about who their business energy supplier is – despite being responsible for this in the business. And a quarter (26%) aren’t entirely sure how much energy their business uses.
So, what have firms been doing to improve their energy efficiency?
- Using energy efficient lighting (65%)
- Energy-saving policies (57%)
- Considering energy-saving resources (52%)
- Improved insulation (49%)
- Attempting to make heating/air-con more efficient (46%)
What are they not currently prepared or able to do?
- Operate an energy management system (89%)
- Move IT to the cloud (61%)
- Generate their own renewable energy (48%)
- Designate a staff member to energy efficiency (42%)
Select the infographics to view the full-size images. The full barometer is available at Business Juice.
A guest post of behalf of Business Juice, in association with iCrossing Ltd.
A home is the most expensive purchase most people will ever make, making it vital that they obtain the best possible advice on house hunting. This means considering a range of factors, some of which will vary according to whether the buyer is a single person, a couple or a family. However, there are a few things which every purchaser needs to bear in mind if the ideal outcome – a home to cherish – is to be achieved.
Money, money, money
It’s vital that purchasers have a clear understanding of how much they can realistically afford; a mortgage broker will be able to help with this calculation and investing in the services of one is an extremely worthwhile action. As a general rule, most banks and building societies will lend around four times a buyer’s annual income, but that is unlikely to cover the entire cost of the house. That means considering, well in advance, how to raise a deposit. It’s also important to bear in mind that a mortgage is a long-term commitment, with repayments continuing for many years to come.
All houses great and small
Although it’s pleasant to dream of a country mansion with extensive grounds, the reality for most buyers is different, so inevitably there will be some compromises to be made here. Many urban terraces and suburban semis can feel somewhat cramped, especially for families, but even a small garden can make quite a difference. Since it’s likely that all the occupants together will spend considerable time in the living room, it’s important that this is not too small. Bedrooms can be shared by young children, but this may cause trouble as they get older, so two small rooms may be better than a single large one.
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With freedom come many challenges. Although a lot of single mothers might find and fancy their new-found financial freedom, other factors and challenges come with it, especially the challenge of saving for a tomorrow. A careful financial planning coupled with mint savings option is the dogs bollocks bet to insulate you from bankruptcy.
A mint financial strategy is dependent on a number of factors that include your income levels, your age, your debt burden, the number of people you support and of course your goals. If you are in the process of recouping your finances then your primary focus should be on debt reduction. Any of these issues, which include divorce, downsizing, job loss and graduation costs, can put your financial planning in a difficult situation. Whatever be the case, your whole focus should be on saving. In other words, you should spend less than what you make and set aside something for an emergency fund to be used only for unexpected circumstances.
The options provided are mainly for single mothers who can effectively maximise their financial resources and augment their saving options.
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Financial comparison websites are there for consumers to purchase financial services products such as general insurance, credit cards, loans and savings accounts. One purpose of price comparison websites is to see everyone have access to appropriate financial products, and the confidence and capability to use them to make a positive difference to their lives.
Many people, particularly those living on low incomes, cannot access mainstream financial products such as bank accounts and low cost loans. This financial exclusion imposes real costs on individuals and their families, often the most vulnerable people in our society. It also has costs for the communities in which they live.
For many families, debt means that substantial parts of their weekly income are spent on servicing loans, and usually for goods already consumed, such as food, petrol or clothing. The consequences of servicing high levels of debt are financially crippling, and have disastrous effects on these families’ health and wellbeing. Access to affordable and available credit would go some way to ameliorating this situation.
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