From July 1 2014 all ISAs will become New ISAs (NISAs). This applies to all existing ISAs and new accounts opened after 1 July. The Government is changing the name to reflect the significantly increased limits and flexibility that will be available to account holders.
The NISA will be more generous and will offer flexibility to save your NISA annual allowance of £15,000 in cash, stocks and shares or any combination of the two. Under the NISA rules you will also be able to transfer previous years’ ISA savings freely between stocks and shares and cash if you wish.
What is changing on 1 July 2014?
From 1 July 2014, you will be able to split the amount you pay into an ISA between a Cash NISA and a Stocks and Shares NISA as you choose – up to the new overall annual NISA limit of £15,000. Previously, it has only been possible to save up to half of the overall ISA subscription limit in a Cash ISA.
Any subscriptions you have made to an ISA since 6 April 2014 will count against the £15,000 NISA subscription limit for 2014-15.
If you have paid into a Cash or Stocks and Shares ISA since 6 April 2014, you will not be able to open a further NISA of the same type before 6 April 2015. You may however make additional payments – up to the £15,000 NISA subscription limit – into your existing account(s) or by transferring those account(s) to another provider that will allow additional amounts to be added.
What does this mean for you ? On a practical level, if you only use cash ISA’s, then from today you can invest an additional £9,060.
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