CHRISTMAS OFFER Subscribe to Hertfordshire Life today CLICK HERE

Finance: Changes in investment

PUBLISHED: 11:49 24 March 2015 | UPDATED: 11:49 24 March 2015

More options are now open to savers

More options are now open to savers


Paul Flack, director of St Albans financial adviser nhance Independent, gives a guide to the range of new government initiatives available for savers

With interest rates likely to remain at record low levels until the autumn, it is more important than ever for savers to consider all of their investment options. A number of new initiatives were introduced in the last Budget, and these are worth exploring when considering where to invest.

From last June ISAs were reformed into a much simpler product, with a more generous £15,000 limit for cash and shares. There is no longer a limit on how much can be invested in cash, so an investor can split ISA holdings between cash and stocks and shares in whatever proportion they wish.

Stocks and Shares ISAs do not have to be high risk investments. It is possible to invest in a mix that is more conservative, and over the past 12 months the growth on many of these investments may have been better than cash interest rates. However an investment in a Stocks and Shares ISA is not guaranteed – the value of the fund could fall as well as rise. Investors can transfer between Cash ISAs and Stocks and Shares ISAs and we would always recommend that advice is sought from a qualified, regulated independent financial adviser to ensure the risk the investment carries matches the level of risk the individual is comfortable taking.

In the last Budget the government also announced that the 10 per cent starting rate of tax for savings income will be replaced by a zero per cent rate, and the band extended from £2,880 to £5,000 from April 2015. This is good news for anyone with a total income of less than £15,500, as they will not pay any tax on their savings. For those eligible, they should register for tax free savings with their bank or building society.

From January this year a new range of fixed rate market-leading Savings Bonds for people aged 65 and over was made available through National Savings and Investments. The bonds offer interest of 2.8 per cent gross over one year and 4 per cent gross over three years, and these are paid net of tax. The minimum investment is £500 and the maximum £10,000. The bonds are available online, by post or phone. They can be cashed in early subject to a penalty of 90 days interest, and the rates are attractive compared to similar investments.

Pensions saw the most radical shake-up in the Budget, with rules changed to allow pension owners to access their funds in any way they wish from age 55, without the requirement to purchase an annuity. The new rules take effect from April 6, and still allow for 25 per cent of the fund to be taken tax free, with the remainder taxed as income. The ‘death tax’ rules have also been rewritten, allowing pension funds to be passed down to future generations free of tax in many situations.

Careful planning can help pension owners make the most of these ‘freedom and choice’ changes. It is crucial to make sure the pension pot doesn’t run out too early, factoring in realistic investment growth on the fund during retirement, while taking income in the most tax efficient manner possible.


Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files

Please log in to leave a comment and share your views with other Hertfordshire visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by Hertfordshire staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique Hertfordshire account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

More from Hertfordshire Life


High jinks and hilarious dancing, Sarah Grosvenor reviews Aladdin

Read more

A young family moved from an outgrown flat in London to an Edwardian cottage in Bushey, lovingly bringing it back to life with vintage finds and sympathetic updates

Read more
December 2018
Yesterday, 10:46

Rosemary Taylor, principal clarinet in the Orpheus Sinfonia, gives an insight into performing the music to a Christmas classic on its 40th anniversary

Read more
December 2018
Yesterday, 10:28

It’s a great tradition, but where to go? Countryside Management Service projects officer Emily Clowry picks five of the best Boxing Day rambles in Herts

Read more
Yesterday, 10:03

Berkhamsted’s Mary Casserley is inspired by history, trains and the posters of the Art Deco period. Her paintings celebrate them all

Read more
December 2018

One of St Albans’ newest restaurant exudes an exciting confidence

Read more
December 2018
Friday, December 7, 2018

Take the whole family to one of these lovely Hertfordshire pubs, including your four-legged friend

Read more
Thursday, December 6, 2018

Come and celebrate with The Three Tuns this festive season!

Read more
Tuesday, December 4, 2018

Hertfordshire’s churches are storehouses of history, yet they also attract legends. Mia Jankowicz follows the mysterious trail

Read more
December 2018
Monday, December 3, 2018

Join us for Christmas at the Bushel & Strike.

Read more

Newsletter Sign Up

Sign up to the following newsletters:

Sign up to receive our regular email newsletter

Our Privacy Policy

Topics of Interest

Food and Drink Directory

Local Business Directory

Search For a Car In Your Area

Property Search