Making the most of your ISA savings requires regular reviews and February is definitely the time to do this. Each year we advise our clients to review their ISA savings and investments to make sure they are growing and consider if they need to make changes.
The main reason we like to suggest to review your ISA savings is that cheaper and better rates and deals can come onto the market and if you don’t review your savings and investments regularly then you may stand to lose money. A regular review can also help you to save tax.
We generally like to set regular review dates with our clients at least once a year that allows enough time to make the most of your tax allowances. February is a great time of year to do this before the end of the tax year.
How to review your ISA savings
When we review your ISA savings, we firstly like to take stock of your current finances. We check if you are saving enough and paying off any debts as planned. We also check to see if any of your circumstances have changed. This will give you a clear picture of where your finances currently stand and help you decide how you need to adjust your savings and investments in the coming year.
We then look into whether your current investments are performing to their best ability. We check if your savings are keeping up with inflation. The Consumer Price Index (CPI) can be used as the benchmark for inflation. This benchmark is suitable for cash deposits and low-risk fixed interest assets such as cash bonds and fixed interest securities. It tells you whether your investment has kept its value against inflation.
We check if you are being as tax-efficient as you can be. The great thing about ISA savings is that they are tax-efficient and you can use them to save cash or invest in stocks and shares. You can pay your whole allowance of £20,000 into a Stocks and Shares ISA a Cash ISA, or a combination of the two and you will pay no income tax on the interest or dividends you receive from an ISA and any profits from investments are free of Capital Gains Tax.
Once we have all of the information above, we can help you review your ISA savings and suggest changes if need be. Changes could be made such as moving accounts to get better deals, selling shares or property to make the most of your capital gains tax allowance or changing the balance between the different types of investments to spread the risk.
Stocks and Shares investments do not offer the same capital security as deposit accounts. Your capital is at risk. The value of your investment (and any income from them) can go down as well as up and you may not get back the full amount you invested.
If you would like us to review your ISA savings or investments, then please get in touch to book in an appointment.