Could you be an ISA Millionaire?
Individual Savings Accounts are a great way to invest free of tax on the income and any capital gains.The amount you can put in each year had gradually increased and as a result of this and the rising stock market prices, a number of people are becoming ‘ISA millionaires’.
Generous Annual Limits
The allowance for the 2017-18 tax year is set at £20,000 so couples could put away £40,000. However, HMRC data has shown that only two-thirds of people earning more than £150,000 a year use up their ISA allowance. With contributions to pensions being subject to annual and lifetime limits, ISA’s represent a way of topping up your retirement income.
Making it to a Million
If you could invest your full ISA allowance in a stocks and shares ISA every year, the ISA limit increased by around 2% each year and investments made an annualised return of 5% after fees. Then you could become an ISA millionaire in 22 years. However, this is not a guarantee as the stock markets can go down as well as up.
Planning for the future
If you are planning to invest this tax year then it is a good idea to put a plan in place as the longer money is invested the more time it has to produce tax-free returns. You cannot carry unused ISA allowance into the next tax year so don’t miss out on the tax breaks available.
How we can help you
We can help you investigate the choices on offer and ensure you use your allowance wisely.