Home Money I’m an investor and I’m backing the British Isa’s extra £5,000 tax-free

I’m an investor and I’m backing the British Isa’s extra £5,000 tax-free

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Michael Taylor, pictured with his wife Nora, says he welcomes the new British Isa

Michael Taylor, pictured with his wife Nora, says he welcomes the new British Isa

Michael Taylor, pictured with his wife Nora, says he welcomes the new British Isa

A new British Isa will allow investors to invest an extra £5,000 in the stock market each year, the Chancellor announced yesterday.

Jeremy Hunt introduced two new British savings accounts in a bid to encourage investment in UK businesses and boost the City: a British Isa, managed by stockbrokers, and new British Savings Bonds, managed by National Savings & Investments ( NS&I).

The British Individual Savings Account will allow stocks and shares investors to deposit an additional £5,000 on top of the existing £20,000 annual Isa allowance, as long as it is only used to invest in UK-listed companies.

It will apply to those who have already used up their annual allocation of £20,000 in tax-efficient accounts.

> What you need to know about the new British Isa

As an investor, I support the British Isa.

Michael Taylor, 33, believes the introduction of a British Isa is a great idea and will help businesses in this country.

Referring to the plans discussed earlier, he said: ‘What they were talking about before was simply setting aside a proportion of the £20,000 allocated from existing Isas for British shares.

“They have now created a completely new Isa, with an extra £5,000 allowance if you only invest in British shares, which makes more sense.”

However, he pointed out that the change will only really affect the rich, who already have £20,000 saved.

Mr Taylor and his wife Nora, pictured, live with their 11-month-old son between London and Hartlepool, where their parents are based. He is a self-employed stock trader.

After taxes, his annual earnings are in six figures. Mr. Taylor doesn’t think the budget has had much of an effect on him. He had hoped to see a reduction in VAT because it strongly affects his business, which generates more than £85,000 in income.

The Great British Investor: Hunt said he had received calls from the City to encourage more people to invest in UK assets.

The Great British Investor: Hunt said he had received calls from the City to encourage more people to invest in UK assets.

The Great British Investor: Hunt said he had received calls from the City to encourage more people to invest in UK assets.

Extra £5,000 to invest tax-free raises questions

Hunt said he had received calls from more than 200 City representatives to reform the Isa system and encourage more people to invest in UK assets.

The heavily UK-focused FTSE 250 was up 1.24 per cent at 3pm yesterday on the news.

Jason Hollands, of Isa provider Bestinvest, said: “The British Isa is certainly a victory for City stockbrokers and bankers who have lobbied hard for it amid a drought of newly listed companies and a worrying reduction in companies listed in London to New York”. .’

However, stockbroking experts have warned that the measures will further complicate an already complex system and will only benefit the richest savers.

Only 900,000 savers made the maximum annual contribution of £20,000 to a stock market Isa, according to official figures from HM Revenue & Customs.

Michael Summersgill, chief executive of AJ Bell, said Britain’s Isa was “doomed to fail in its objectives of driving growth” and would apply only to a “small minority”.

For most people, the British Isa just adds unwanted complexity.

Michael Summersgill and AJ Bell

He said: ‘Fifty per cent of the money our clients currently invest through their stocks and shares Isas is invested in UK assets, so this new allocation will have no impact on their investing behaviour.

“For most people, the British Isa just adds unwanted complexity.”

Rachael Griffin, tax and financial planning expert at Quilter, said: “While the UK Isa is presented as a strategic measure to boost the UK stock market and economy, it is fraught with potential dangers and may not address the root causes. insights into the challenges facing the UK financial sector.

“The move is likely a politically motivated stunt ahead of the next election, rather than a well-thought-out strategy aimed at sustainable economic growth.”

Investors who put too large a proportion of their money in British shares risk giving up better returns in global shares.

Over the past five years, the FTSE All Share, which tracks UK listed companies, has returned 7.67 per cent, while a fund that tracks the global market has gained 13.03 per cent over the last five years. the same period.

NS&I will launch new British savings bonds early next month, guaranteeing savers a fixed interest rate for three years on investments between £500 and £1 million. The bonds will replace NS&I’s Guaranteed Growth Bonds and Guaranteed Income Bonds, which were last on sale in 2019.

The three-year interest rate will be announced next month according to the market and investors will be able to open an account online. There will be support for customers who cannot connect online.

Any money invested in the Treasury-backed bank is safe and invested to support the UK.

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Compare the best DIY investment platforms and stocks and shares Isas

1707793746 568 How a Bed Isa can protect you from a

1707793746 568 How a Bed Isa can protect you from a

Investing online is simple, affordable and you can do it from your computer, tablet or phone at a time and place that suits you.

When it comes to choosing a DIY investment platform, stocks and shares Isa or general investment account, the range of options can seem overwhelming.

Each provider has a slightly different offering, charging more or less to trade or hold shares and giving access to a different range of shares, funds and investment trusts.

When assessing which one is best for you, it is important to consider the service it offers, along with any administration and dealing charges, plus any other additional costs.

To help you compare the best investment accounts, we’ve looked at the facts and put together a complete guide to choosing the best and cheapest investment account for you.

We highlight the main players in the table below, but we recommend that you do your own research and consider the points in our full guide linked here.

>> This is Money’s complete guide to the best investment platforms and Isas

The platforms shown below are independently selected by This is Money’s dedicated journalists. If you open an account using links that have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence.

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Administrative position Notes of charges Fund trading Standard Shares, Trusts and ETF Trading Regular investment Dividend reinvestment
AJ Bell* 0.25% Maximum £3.50 per month for shares, trusts and ETFs. £1.50 €9.95 £1.50 £1.50 per bid More details
Bestinvest* 0.40% (0.2% for ready-made wallets) The account fee is reduced to 0.2% for investments already made Free £4.95 Free for funds Free for income funds More details
Charles Stanley Live 0.35% No platform fee on shares if a trade is made in that month and an annual maximum of £240 Free £11.50 n/a n/a More details
Fidelity* 0.35% on funds £7.50 per month up to £25,000 or 0.35% with regular savings plan. Maximum £45 per year for shares, trusts and ETFs Free £7.50 Free Funds £1.50 Shares, ETF Trusts £1.50 More details
Hargreaves Lansdown* 0.45% Capped at £45 for shares, trusts and ETFs Free €11.95 £1.50 1% (£1 minimum, £10 maximum) More details
Interactive investor* £4.99 per month under £50,000, £11.99 over, £10 extra for Sipp £3.99 per month in free business credit (does not apply to £4.99 plan) €3.99 €3.99 Free €0.99 More details
iWeb £100 one-off fee (not applied until July 2024) £5 £5 n/a 2%, maximum £5 More details
Accounts that have some limits but attractive offers
Etoro* No Isa or Sipp Free The investment account offers stocks and ETFs. Be careful with high risk CFDs on trading account Not available Free n/a n/a More details
Free trade*No investment funds Free for Basic account, £4.99 per month for Standard Account with Isa £9.99 for Plus Freetrade Plus with more investments and Sipp costs £9.99/month inc. isa rate Without funds Free n/a n/a More details
Vanguard Only Vanguard products. 0.15% Vanguard funds only Free Free Vanguard ETFs Only Free n/a More details
(Source: ThisisMoney.co.uk, February 2024. The administrative percentage charge can be applied monthly or quarterly.

Some links in this article may be affiliate links. If you click on them, we may earn a small commission. That helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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