If you’re the type of person who continually spends to the max each week or month, you probably don’t have any savings. Saving a lump sum of cash is much easier than you think. Making a few small economies and budgeting helps identify areas where you can save £20 or more weekly. For example, cut out a few trips to the coffee shop and a takeaway meal weekly and save the cash instead.
Although it’s difficult to develop a regular savings habit, once you make a start, cash soon mounts up. Low interest rates on traditional savings accounts make them unattractive, however saving in an ISA benefits you in a number of ways
Saving in an ISA is a tax efficient way of saving, as any individual can save up to £20,000 each year and there won’t be any tax due on interest paid or withdrawals. It’s amazing just how quickly a cash pot mounts up when you save regularly. According to the experts at Moneywise anybody who invests the maximum allowable amount in an ISA returning 7% or more each year will save over £1mn within 22 years. This may seem totally out of your reach at the present moment, but as you watch your ISA savings cash pot grow you will certainly find it’s easy to build up substantial savings. Our Absolute ISA offers returns of 9.6% annually.
No capital gains tax
There is no capital gains tax requirement on ISA savings, so it doesn’t matter how big your savings cash pot grows as the tax man won’t touch your capital.
Access to your savings
Your ISA savings won’t be locked away indefinitely. You can access the cash in your ISA without any penalties after 2 years. But, one main benefit of ISA savings is allowing them to grow over a long period so you see the results of compound interest.
Absolute ISA believes in developing trusting, long-term relationships with our ISA investors. We’re committed to providing the best possible returns to all savers, making it easy to reap the benefits of a regular savings habit. Check our website for more details.