What Is the ISA Allowance Cut Off Date?
We all know how important it is to make the most of any tax-free savings allowance offered to us by the government. One way to do this is to make full use of your annual ISA allowance. But what is the cut off date for your annual ISA allowance, and how can you make the best use of your money?
Cut Off Date for Your Annual ISA Allowance
Every year, your tax-free ISA allowance renews, allowing you to invest more tax-free cash. In the 2016-2017 tax year, you can invest up to £15,240 tax-free when you save or invest your money into a Cash or Stocks and Shares ISA. If you still have some of your ISA allowance remaining for the current tax year, then the cut off date for you to invest or save this cash is the 5th of April 2017. If you don’t place your cash into an ISA before this date, then you will lose this potential tax-free savings allowance and, unfortunately, it will not rollover into the next year.
Stocks and Shares ISA or Cash ISA?
When most people think of ISAs they generally think of a standard type of savings account, where you place your money into an ISA account and you then receive interest on your savings. This would be referred to as a ‘Cash ISA’.
Although Cash ISAs are suitable for some people, many people choose to invest in Stocks and Shares ISAs instead. Many also choose to invest in a mix of the two ISA types.
Stocks and Shares ISAs still allow you to invest your cash tax-free, but they have the added benefit of allowing you to invest in the world’s stock markets at the same time, with the hope of gaining a better return on your savings. With a Stocks and Shares ISA you can either manage your own investments 100%, or, if you choose a provider like Hargreaves Lansdown or Standard Life, then these companies can also help you to choose your investments by offering investment guidance, so that you don’t have to spend too much time making your own investment decisions.
Whether you choose to go for a Cash ISA or a Stocks and Shares ISA will usually depend on your attitude to risk. If you are extremely risk averse then you may be better off sticking with a Cash ISA and accept the savings rates on offer. If you don’t mind taking a little risk with the hope of greater returns, however, then a Stocks and Shares ISA will allow you to do this and might therefore be for you. You will also be investing in the stock market with some extra tax benefits that wouldn’t exist if you were to invest in the stock market directly through a standard share dealing account, such as your investments being free from Capital Gains Tax, for example.
Don’t Miss Out!
So, now that you know the ISA allowance cut-off date, be sure not to miss it! It’s well worth keeping in mind that your allowance will not roll over into the following tax year. So, once April 5th has passed, your ISA allowance for that tax year will be lost.
You might also want to consider a Stocks and Shares ISA if you are looking for a better return on your savings. This type of ISA account does carry a certain degree of risk however, so please be sure that you are happy with any potential risk before choosing a Stocks and Shares ISA over a Cash ISA.