ISA Regime change

On 6 April 2008 new ISA rules will come into effect.

The annual ISA allowance will rise to £7,200 and the distinction between maxi- & mini- ISAs will be removed.

There will simply be two types of ISA - a cash ISA and a stocks & shares (S&S) ISA.

You will be able to invest up to £3,600 in a cash ISA during each tax year and the balance (up to a total of £7,200) can be invested in a stocks & shares (S&S) ISA.

In addition, Personal Equity Plans (PEPs) will become S&S ISAs, and you will be able to transfer cash ISAs into a S&S ISA.

Things to watch

With cash ISAs the highest interest rate is not always the best. Some banks attract savers into top of the table interest rates, only to drop their rates later or fail to increase them when other providers increase theirs.

Base rate tracker ISAs will follow the Bank of England rate and often offer a better deal.

With S&S ISAs, never forget that past performance tells you only one thing: what has done well in the past.

You need to know what will do well in the future and there is plenty of free research available from our website.

The most important thing is to use your ISA allowance each year if you can by 5 April. Once gone it is lost forever and you will be letting the tax man get his paws on your hard-earned savings.

Charges

Opening a cash ISA should be free.

But investment is one of the few areas where it can actually cost less to use a middle-man like ourselves.

If you open a S&S ISA with an investment company directly you may be charged as much as 5% of your initial lump sum for the privilege.

However, we offer you full advice for only £25 and then discount you the commission, to offset the fees from the company. And we will rebate the £25 as well if you do the investment through ourselves!

Regular contributions

You don't have to invest your money all in one go.

Most ISAs offer regular savings plans - which is a superb way to capitalize on market volatility.

Falling markets allow you to buy units in your chosen funds at lower prices, so if the market eventually regains its lost ground they will count for much more.

If the current market volatility is making you nervous, don't forget some ISA managers also allow you to hold cash within your ISA, so you can secure this year's allowance and choose where to invest later.

You might even get a high fixed interest rate for any new money you invest.

So what about your existing ISAs?

In effect the new rules will make very little difference to any ISAs you already hold, although there can be a significant change for the tax on cash in PEP’s that are being converted.

Service

We provide a full service for all your ISA portfolio without incurring any further cost to you – it allows you to hold a variety of investments in a single account - so the days of having a different ISA accounts with different providers who all send you reams of paperwork are over.

You can simply transfer your ISAs as they are - there is no need to change your holdings to benefit.