OVER 50’S MISS OUT ON £4.7BN PER YEAR

Do you know you’re tax free saving limits from your elbow? It seems many over 50’s don’t.03-03-2010

 Savers over 50 were asked whether they knew how much money they were allowed to save in cash and investment ISAs (Individual Savings Accounts).  Just over one in every 8 knew their stocks and shares ISA limit has risen to £10,200 but more than a third guessed totally different values and 7% didn’t realise that a tax free allowance existed.
The new level for cash ISAs is £5,100  for over 50’s - it changed in October 2009. With more than 21 million people in Britain aged 50 and over, around 3.15 million people are missing out on an extra £1,500 of tax efficient investments.
 The research was carried out by Selftrade: Mark Pearson is Chief Marketing Officer: "It is clear from the research that the new ISA subscription levels for over 50s are not widely understood. With ISA season upon us, many will see this as an opportune time to take control of investment planning and make full use of their tax allowances.”
An ISA isn’t a product on its own, but a tax wrapper around a savings or investment product, which protects your interest from being taxed. If you want to have an ISA you need to shop around for ones that give you the best rates of interest and that interest will be tax free.
There are various ways you can invest your money:
1: You can invest in two separate ISAs in any one tax year - a cash ISA and an investment ISA. This can be with the same or different providers. You have to be 16 to start a cash ISA and 18 to start an investment ISA.
The current ISA limits for cash ISAs are:
•    £5,100 for those aged 50 and over
•    £3,600 for those under 50.
From 6 April 2010 the annual investment in a cash ISA will be £5,100 for everyone.
2: You can use an investment ISA: you invest in longer-term investments such as individual shares or bonds, or pooled investments (such as open-ended investment funds, life assurance investments or investment trusts).
If you choose to invest in both a cash and an investment ISA the current total amount you can save is limited to:
•    £10,200 for those aged 50 and over. Up to £5,100 of that can be saved in cash with one provider. The rest can be invested in an investment ISA with either the same or a different provider.
•    £7,200 for those under 50. Up to £3,600 of that can be saved in cash with one provider. The rest can be invested in an investment ISA with either the same or a different provider.
From 6 April 2010 the limit will rise to £10,200 (of which £5,100 can be saved in cash) for everyone.
3: You can choose to invest the whole £10,200 allowance in an investment ISA: this can only be with one provider in any one tax year.
If you want to take up your ISA allowance for this tax year you need to do it by 5 April. And from 6 April this year, everyone will be able to put more into an ISA. There’s more on how ISAs work and the savings limits at  www.moneymadeclear.fsa.gov.uk - click on savings and investments.