The Business Bulletin
Getting your financial life in order ‘ISA season’ used to be an event, where banks and other financial institutions would get their marketing teams going on offering the best cash interest rates on ISAs. With current interest rates being unlikely to move for some time to come, it’s somewhat of a damp squib. ISA=Individual Savings Account.
Getting saving early really can pay
degree by inflation. Inflation (CPIH)
off. Think about it – if your money is
is 1% as of Apr’21, meaning this 1.1%
have both a LISA & HBISA. You can
invested or earning interest today,
interest rate is barely above inflation.
no longer open HBISAs and therefore
you’ve a better chance of that money growing over a longer period of time. Getting your financial life in order will pay dividends.
Remember, some basics… ISAs are tax efficient ‘wrappers’. This means any future gains or income are free from tax. Simple. Some ISAs are
It is sensible planning to retain a cash reserve for emergencies, holidays and other purchases, but holding too
of your cash into a Stocks & Shares ISA for example. Over the longer term (we would horizon of 5 years), history suggests
again, using the ISA allowance based
investing, alongside dividends received,
the net of these transactions.
will outperform cash returns. There
Lifetime ISAs (more on this later) and
then a LISA is the only option and
the long term. You could invest some
in & take it back out & put it back in
Finance ISAs (peer to peer lending),
already have an HBISA. If you don’t,
assets is not going to work for you over
flexible, meaning you can put money
Shares ISAs (investing!), Alternative
this quandary is only applicable if you
much cash as a percentage of your
always suggest a minimum investment
You can have cash ISAs, Stocks &
The good news is that you can
are no guarantees of course. You could invest in a tracker fund, which essentially follows a stock market index of some sort, for example the top 100
Junior ISAs (for children <18).
listed companies in the UK.
What are you doing with your cash? A brief search recently (Apr’21)
Can I have a Lifetime ISA (LISA) and a Help to Buy ISA (HBISA)?
suggested a top interest rate in a cash
These are ISAs designed to help first
ISA of 1.1%, if you lock that cash away
time buyers when buying their first
for 5 years. For the privilege of locking
property by providing a government
your money up for 5 years, at 1.1%, the
bonus towards the purchase. The LISA
interest earned would be just £562.
is also a quasi-pension that allows
Over that period, the value of the
non-first time buyers to save towards
cash will have been eroded to some
their retirement.
Neil Wattam Wattam Kirby Mee Neil has worked in various finance and accounting roles since 2004, starting as an auditor, followed by senior positions within FTSE 100 and FTSE 250 companies, including as Finance Director. His experience of working in numerous
44 | Issue 9 – Finance
businesses and sectors, including running a limited company, provides a sound base from which to help clients. Neil is a Chartered Accountant (ICAEW) and holds the Diploma in Regulated Financial Planning (CII). Neil is studying towards Chartered status with the CII. 0116 218 4891 neil@wkmwealth.co.uk wkmwealth.co.uk
