Page 26 - Phonebox Magazine April 2008

Finance Matters
brought to you by Advison Independent Financial Advisers
£120 billion ‘freed up’ by ISA changes!
The 6th April 2008 will see a fundamental change to the ISA regime and bring to an end Personal Equity Plans (PEPs) which were originally introduced by the Conservative government back in 1986. Changes were made to PEPs in 2001 to bring them more into line with ISAs but as from April they are being renamed as Stock and Shares ISAs and will no longer exist in the current format. ISAs will also now be available indefinitely following the removal of their end date which was previously set at 5th April 2010.
Another, much welcomed change is the end to the Mini and Maxi ISA. This has long caused confusion among the general public and has often led to individuals inadvertently breaking the rules over contributions. At the same time as this change, the contribution levels are also being increased and, in the future, you will be able to invest £7,200 into an ISA, with up to £3,600 in a Cash ISA. These limits represent an increase of £600 allowed into Cash ISAs and £200 into the ISA overall.
In addition to the removal of Maxi and Mini ISAs, TESSA Only ISAs (TOISAs) will no longer exist and in the future will become Cash ISAs.
However, for many people the most significant change will be the ability to transfer from a Cash ISA to a Stock and Shares ISA. Cash ISAs were introduced in 1999 and in total there is estimated to be around £120 billion invested in these accounts. If a couple had used their allowance in full every year since they were introduced, they would now have in the region of £70,000 invested, depending on the level of interest they had received.
For many couples this level of cash is higher than they need or want. However, the tax advantages of the accounts means that they are rarely moved into non cash holdings which could potentially provide greater returns. This will all change from April and has coincided with a period where shares have fallen sharply over the last few months, potentially providing an opportunity for many investors of the right risk profile.
This represents a major opportunity for many investors to review their savings and investments, in light of the changes that are being brought in. Expert independent advice is essential to ensure you make the most of the opportunities available.
Unlike many IFAs, Advison not only provides the initial advice you require but also produces regular personalised reviews of your Investments, Pensions and Protection Policies, enabling us to ensure the assets you hold are still relevant to your circumstances. We would be pleased to discuss your specific situation and plan the most appropriate course of action for you. For full details about Advison please see our advertisement below.
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26 Phonebox Magazine