Tax free ISA fails to lure UK customers |
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Published
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Mon, 07 Mar 2005 01:00
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People in the UK seem to be giving a lot of money to the taxman: more than what is actually needed. Quite weird, isn’t it? Well, people in the UK have been found not to be investing their savings in beneficial tax free accounts, thus, paying interest on savings at the same rate as other income. This denotes that a person with an income exceeding £6,575 loses an alarming 22% of the income from his savings inspite of the ISAs being offered.
The ISAs are just the perfect solution to this tax problem. They are one of the best ways to save with no taxes on your savings interest. Furthermore, facilities like instant access to cash and competitive rates are an added advantage. Opening an ISA is also very simple and reasonable. One can own an ISA with a just a single pound and pay upto 5.4% interest. The Government has also allowed people to invest upto £3,000 in cash every year in an ISA and the good news is that you have the option of withdrawing this money as and when you like without any prior notice or any sort of penalty.
| However, studies by Intelligence Finance show that in spite of such lucrative options available to the people, 47% of people saving more than £2000 did not own an ISA and seemed to have no plans in the future either. This only signifies the taxman getting richer, offering no benefits to the tax payer. It has also been noticed by Alliance & Leicester Savings that of the 54 per cent of the adult population having an ISA, two in three have found to have made no investments this year.
The point is that people should make intelligent use of an ISA allowance for investments for their future. Mini cash ISAs are also available for certain investors that offer attractive interest rates and provide adequate safety for their capital. In addition, high growth prospects for the longer term are offered in the stocks and shares ISA.
For people wary of the stockmarkets and who plan to adhere to their normal savings accounts, use of their £3000 ISA cash allowance in the least is recommended.
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