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Your ISA Guide 2016/17

 

Don’t know your ISA from your NISA? Wondering what the difference is between a cash ISA and stocks and shares?

Read our beginners guide below and find the answers to your most commonly asked questions.

What is an ISA?

An ISA (Individual Savings Account) is a form of tax-free savings account designed for savers to hold cash or investments.

An ISA gives you a tax-free allowance each year. With a standard savings account, you are taxed on the interest that you earn.  With a tax-free ISA all the interest that you earn is yours to keep.

I keep seeing the term NISA?  Is this different?

ISAs have been around since 1999, but in July 2014 the government changed the rules as to how much you are entitled to save and the format in which you can invest.  These accounts are now known as New Individual Savings Accounts or NISAs, however to ease confusion we’ll still be referring to them as ISAs.

What is the 2016/17 ISA Allowance?

From 6th April 2016 the new tax year starts. The ISA allowance for the 2016/17 tax year will remain the same at £15,240.

The options for how to use your allowance are:

  • Save up to the allowance in a Cash ISA (you may only save into one Cash ISA however with NatWest you can also split the amount between a Cash ISA and Help to Buy: ISA)
  • Invest up to this amount in a Stocks & Shares ISA
  • Invest up to this amount in an Innovative Finance ISA (a new type of ISA for peer to peer lending)
  • Split your allowance between a Cash ISA, Stocks & Shares ISA and a Innovative Finance ISA (For example: Pay £10,000 into a Cash ISA and £5,240 into a Stocks & Shares ISA)

Are there different types of ISA?

Cash ISAs: A cash ISA is similar to a standard bank or building society savings account, the difference being that it enables you to earn interest tax-free.

There are various different types of cash ISA available, including instant access accounts and fixed-rate accounts.

Stocks and shares ISAs: This type of ISA can hold a range of funds, individual shares, government bonds and corporate bonds.  As with any stocks and shares investment this carries an element of risk and returns aren’t guaranteed – there is even a chance that you may lose money.  However, statistically, you are likely to achieve a higher return on your investment in the long-term as opposed to saving in a cash ISA.

You can use your allowance however you please – you could choose to invest the full amount in a stocks and shares ISA or place it all in a cash ISA.  Alternatively you can split your allowance between the two, it’s completely up to you.

Who is eligible for an ISA?

Anyone who is resident in the UK for tax purposes is entitled to hold an ISA.  You must be 16 or over to hold a cash ISA and aged 18 or over to invest in a stocks and shares ISA.

As the name suggests an ISA is for individual savers only, you cannot hold an account jointly with another person, or on behalf of someone else.

How much will an ISA cost me?

You don’t need to pay anything to open a cash ISA – although some accounts may expect a minimum deposit.  The most important thing is to find an ISA with a competitive rate of interest to give you the best return on your money.

With a stocks and shares ISAs you’ll likely incur a set up fee (usually a flat-rate) and often an annual charge (usually a percentage of your current investment).  You’ll also face charges for buying and selling funds so it’s important to look for a low charge if you are going to be actively trading funds.

How do I open an ISA?

ISAs are available from a range of providers including banks, building societies, credit unions, friendly societies and stock brokers.   Some accounts can be opened in person, others operate online only.

Use a comparison site to view the different types of ISA available from a range of providers.

Can I withdraw money from an ISA?

ISAs work best for savings over the long-term because of the compound interest i.e. earning interest on the interest, so if you can avoid making withdrawals this will help you to make the most of your money.

Some Cash ISAs will allow you to lock your money in for a certain period of time – and often these will give you a better rate of interest than easy-access accounts.  These are designed to avoid temptation as if you do make a withdrawal you are likely to face a penalty charge for doing so, and may lose out on any bonuses that the account offers.

However if you are using your ISA as a rainy day fund, there are going to be times when you need access to your money at short notice.  Look for an account that gives you the flexibility to do so without incurring penalty charges, the only downside being is that the rate of interest you receive may not be so good.

I already have an ISA but my rate has dropped. Can I transfer to another ISA?

Yes, you can transfer money in your ISA to another provider at any time but you should always check with your current provider that there aren’t any restrictions in doing so (i.e a charge).

In order to move your ISA whilst still enjoying your full tax-free allowance, you’ll need to fill in an ISA transfer form – your new provider will be able to provide this for you.

Is there an ISA for children?

Yes, there is. In 2011 the government introduced Junior ISAs to replace the now defunct Child Trust Fund.   The tax-free allowance in 2015/16 will be £4,080.

Any child under the age of 18 is entitled to hold a Junior ISA.  Parents or guardians can open the account and make regular deposits, however the money belongs to the child and therefore parents can’t make any withdrawals.  Children can take control of the account when they reach the age of 16, although they cannot withdraw any funds until they are 18.

Selling your annuity

 

Chancellor George Osborne took the opportunity during his recent Budget announcements to unveil yet more pension freedoms, the majority of these due to take effect from April 2015.  From April 2016, the Government will allow individuals who are already in receipt of an income from an annuity to potentially trade this in for cash or to move into a more flexible income drawdown arrangement. For clarity, annuities are a form of insurance or investment allowing the payment of an income to an individual typically for the rest of their life and have previously been very inflexible.

Mr Osborne is quoted as saying that “people should have freedom to choose how they use their savings – we will give five million people access to their annuities”. The Financial Conduct Authority will be tasked with creating a regulated secondary market with further details of how this will work to be announced in due course.

This will be a very specialist area involving the giving-up of an income entitlement for a cash sum and therefore anyone considering the sale of their annuity should seek independent financial advice from a suitably qualified advisor. If you would like to discuss this in more detail, please do not hesitate to contact Mike Oliver.

Dec 042014
 

 

Financial planning and advice is not just for the very wealthy – everyone can benefit from it. Good financial planning can help you achieve your future goals and aspirations and secure you and your family’s long-term future. Here are 10 reasons why you should speak to an IFA.

 

What is an IFA?

No 1: To protect your loved ones

Many people trying to sell insurance of one type or another but an independent financial adviser can tell you which one is best suited should the unthinkable happen. An independent financial adviser will assess your position and guide you through the best options to protect yourself and your family whether you are single, married, have children or they have long left home. Whatever your needs, an adviser can help ensure personal tragedy does not turn into financial crisis.

No 2: To help plan your spending – and saving

To secure your long-term financial future, you need to build some assets, initially to get you through the rainy days and then to pay for those holidays and luxuries. So, step one is to plan your spending so that you can begin to save – and step two is to plan to save so you can build your wealth as efficiently as possible. Regardless of whether you currently have £10 or £10,000, an independent financial adviser will look at your situation and find  the best starting point for you.

No 3: To help you plan for retirement

Once your short term saving needs have been met, you are then in a position to start thinking about your longer term goals. People are becoming more aware that they cannot rely on the State for more than the absolute basics. However, planning for retirement is a complex business and there are many different options available.

Pensions have come a long way in terms of flexibility in recent years and now offer a wide range of investment options. An independent financial adviser will not only help sift through the many rules and product options but can also help construct a portfolio to maximise your long term prospects.

No 4: To buy your home

The mortgage market was complicated enough already, with its discounts and variables, AERs and caps, indemnities and early redemption fees. Then the credit crunch hit and things have got even worse. However, buying a house is still one of the most expensive decisions we make, and the vast majority of us need a mortgage.

An independent financial adviser could save you thousands, particularly at times like this. Not only can they seek out the best rates, they can help you assess sensible levels of borrowing, make the most of your deposit and might also find lenders who would otherwise not be available to you.

No 5: Financial planning

As you progress through life, you begin to build your assets and your income begins to increase. You then start considering how you can enhance your position rather than simply consolidate it. This could mean anything from looking to retire early through to paying school fees for private schools or investing in overseas property.  However your dreams evolve, an independent financial adviser can help assess what is realistically possible – and put the best plan in place to help you achieve it.

No 6: To find the right combination of assets

Investment is as much about protecting the potential downsides as it is about targeting maximum growth. High returns are often associated with high risk – and not everyone is happy if their investment falls by a third or more overnight. An independent financial adviser will make a detailed assessment of your attitude to risk before making any recommendations. They will also ensure you don’t put all your eggs in one basket by helping you diversify not only across asset classes but also across accounts, individual funds and product providers.

No 7: To obtain an objective assessment

Every new product or investment opportunity is accompanied by hype, proclaiming it is the best ever –but that does not mean it is right for you. Investors the world over have been and will continue to be caught out by market bubbles or high charges because they don’t take a step back. A financial adviser knows how products and assets work in different markets and can outline the downsides for you as well as the benefits. Between you, you can then make a more informed decision about what hype you can believe – and what products you really need to avoid.

No 8: To save money

Once your risk and investment assessments are complete, the next step is to look at tax and even the most basic overview of your position could help. It may simply mean using ISAs or a pension plan to benefit from Government incentives or it could mean choosing growth assets over income to use capital gains allowances rather than pay income tax. Alternatively, for more complicated arrangements, it might mean moving assets to your spouse or children to make full use of their personal allowances. An independent financial adviser will always have your tax
position in mind when making recommendations and can help point you in the right direction even in complicated situations.

No 9: To keep you on track

Even when you have every product you need taken care of and your investments are set up and running to plan, someone needs to keep an eye on them in case changes in markets or abnormal events push them off course. You can ask an independent financial adviser to do this monitoring work for you. They can assess the performance of individual investments against their peers, ensure that your asset allocation does not get distorted as markets move and also help you consolidate gains as the dates of your ultimate goals approach.

No 10: For peace of mind

Money is a complicated subject and there are many things you need to think about to both protect it and make the most of it. Markets are volatile and the media is prone to exaggeration of both the risks and the rewards. Employing a good independent financial adviser can take the emphasis away from you and move it into the hands of an expert. Whether you need general, practical advice or a specialist with dedicated expertise, the money you invest in taking advice could be paid back many times over in the long term.

At MOA we believe we believe every client is altogether individual and deserves tailored independent financial solutions. If you would like to benefit from our objective, professional and personal service.

The value of pensions and investments can fall as well as rise, and you can get back less than you invested.

Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured on it.

For mortgages we charge a fee of at least £600.  We will also be paid a procuration fee from the provider, if one is available.

Later Life Advice & Asset Protection

 

REDUCING THE COST OF LONGEVITY

For Later Life and Long Term Care advice we act as introducers.

Long term care is a hot news topic at the moment, with the government looking into how much individuals should be expected to contribute towards their own care should they need it, and how much should be funded by the state or local authority. Long term care means the provision of services to help an individual, often a senior citizen, with a chronic illness or disability who cannot care for themselves or who needs some level of assistance with daily practical matters such as eating, washing and dressing. This kind of care can be given at the person’s own home or in a nursing or residential home, according to the needs of the individual.

Funding for long term care is not straightforward, and there are several different ways it can be paid for.  Depending on the type of illness and your financial situation, long term care may be completely or partly-funded by the NHS or your local authority. To make sure you qualify, your financial means will be assessed, with your income, savings, pension and value of your property all taken into account.

Should you not qualify for funding, you would currently be expected to fund long term care entirely by yourself, so it’s a good idea to think about how you would manage this. Long term care can be paid for out of your income, or assets,for example by releasing equity for your home, or selling your home. Alternatively, you may wish to protect your assets and any inheritance you would like to leave your family, by taking out long term care insurance. Talking to an IFA or financial adviser can help you plan ahead and prepare for this, and help you choose an insurance scheme which is the most cost effective for you.

With the government currently responding to the Dilnot report on reforms to the funding of adult social care, this is an area that may be subject to change over the coming months or years. Once it becomes clearer what the government’s own proposals will be, it’s highly likely that insurance companies will start to offer new schemes to help people plan and prepare for their future. Your financial adviser who specialises in long term care will be able to advise you on latest developments and what is best for you.

Home reversion plans and lifetime mortgages are complex products.  To understand the features and risks, ask for a personalised illustration.

For equity release we can be paid by commission, or a fee of usually £600 or a combination of both.

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For a confidential chat call Mike Oliver direct on 01444 449222

The Later Life Academy

The Society of Later Life Advisers

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Call: 0845 4021757 or o1444 449222
Email: advice@moaifa.co.uk

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Savings and Investments

 

Savings and InvestmentsSavings and Investments can be a good way to provide for a secure financial future.  We can:

  • Help you understand the difference between Savings and Investments
  • Explain the main types of Savings and Investments products
  • Identify your investment needs

Once we are aware of your needs, our team of experts will guide you with advice on:

  • How to get started
  • Key points for consideration
  • The choice between investing lump sums or investing regularly
  • How to build a successful portfolio and reduce risk
  • Your rights as an investor

There are four key stages to our advice process:

Discovery, Research, Recommendation and Review

Discovery

We will ask for the right information to advise you:
• Your financial and other objectives
• Your attitude to investment risk
• The likely term of your investment
• We will ask you to sign letters of authority in relation to existing plans

Research

We will research your existing arrangements including:
• Costs comparison with alternatives
• Investment risk comparison to your attitude to risk
• Investment performance comparison with benchmarks

Recommendation

Once our research is complete we will recommend a course of action that is in your best interests. We will explain:
• The product selected and reason (including why you should retain your current plans, if that is our advice)
• Costs and charges
• Investment strategy

Review

Depending on your instructions, we can give one off advice, or support you with a regular programme of reviews, to ensure that initial advice remains up-to-date on going.

Speak in confidence to us on 0845 4021757 or tell us your requirements on the Contact Us page and we will get straight back to you.

Mike Oliver Associates are directly authorised and regulated by the Financial Conduct Authority.

Welcome to Mike Oliver Associates, we are a firm of Independent Financial Advisers directly authorised and regulated by the Financial Conduct Authority (FCA)

 


We’re delighted to be headline sponsors for the Business Matters Annual Awards 2017, supporting, recognising and promoting local businesses and their achievements.

We’d like to wish everyone taking part the very best of luck!

 

 

 

 

 

 

Wouldn’t it be great if I could contact an experienced

Independent Financial Adviser who is:

  • From a multi-award winning firm and respected member of the business community
  • On the high street, so that I can drop in for a chat when I want to
  • Available to call out of normal working hours, if I need to talk in confidence
  • Able to visit me at home or at my business, when it is convenient to me
  • Understanding of my budget and aspirations, but doesn’t put me under any obligation
  • Able to research the whole of the market for me
  • Able to advise me on all aspects of my finances, throughout my life
  • Able to assist with my savings, investments and taxation planning
  • Prepared to explain any fees up front and in writing, in a way I understand
  • In regular contact with me to check if there are any changes to my circumstances
  • Able to update me with the latest financial developments.

Here for me………for life

 

What is an IFA?

10 Reasons to use an Independent Financial Adviser

 

The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.

Where you have a compliant or dispute with us and we are unable to resolve this to your satisfaction then we are obliged to offer you the Financial Ombudsman Service to help resolve this. Please see the following link for further details:  http://financial-ombudsman.org.uk/

The Financial Conduct Authority does not regulate taxation & trust advice, will writing, some aspects of commercial mortgages, buy to let mortgages, finance and secured loans.

We are entered on the Financial Services Register No 646955 at www.fca.org.uk/register/ and further information can be found on the FCA’s consumer website ‘The Money Advice Service’