As a new tax year dawns on 6 April, the time has come to once again take a look at your ISA.
The savings limit resets at the start of every new tax year and it remains best practice to invest as much as you can.
However, this is the last tax year to maintain the current ISA format for many savers, so it is worth understanding how to make the most of it.
What is changing with ISAs?
From April 2027, people under 65 will face a reduction in the annual cash ISA allowance.
The allowance will be capped at £12,000, down from the current £20,000 allowance.
The remaining £8,000 can still be used, but this must be done by utilising stocks and shares ISAs.
Savers over 65 are not going to be impacted by the change and it is believed that the restriction will lift once a person reaches this age.
How should I prepare for the changes to ISAs?
It is advisable to use as much of your existing cash ISA allowance as you can this year to strengthen your tax-free savings ahead of the new restrictions.
However, now is also the time to explore your options for a stocks and shares ISA.
Stocks and shares ISAs are higher-risk than cash ISAs, so it would be wise to understand how utilising one may affect your finances.
Rather than rush a decision in 2027, take the time this year to thoroughly research the options available to you and make an informed choice.
Speak to our team for specialist support with making the most of ISAs.
