Learning to save when you're young is a great habit to get into for later life. Some people become accustomed to saving faster and more readily than others, but what is clear is that saving is vitally important. We live in a time where tuition fees for university, weddings, cars and house maintenance/repairs are becoming more and more of a financial burden, and having money saved up can really help to make affording these things realistic.
There are plenty of options to consider when it comes to saving, but making the most of tax-exempt saving is crucial in order to reap the benefits. Accounts such as ISA’s, whether they are in the form of cash or stocks and shares, are a fantastic way of doing this, while for children, the Junior ISA (JISA) was launched in November 2011.
These accounts are so useful because they are out of the reach of the taxman, and this means he any gains such as interest earned on the account is yours to keep. The maximum annual allowance for a cash ISA is £5,640, while you can deposit up to £11,280 into a stocks and shares ISA. All JISA’s are subject to maximum limit of £3,600 per annum.
You must however bear in mind that investment in ISA’s are long term plans, typically 5 years or more, so if you are looking for a shorter-term investment then it would be necessary to look at higher interest current accounts.
The most basic financial advice you will ever receive – save as much as you can, as early as you can.
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Is it too little too late for savers in the UK?
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National Savings and Investments slash savings rates
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Savers urged to lock in to 5% fixed rates
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