NISAs have landed – our guide to how they work

If you’re a saver, a NISA might just be your new best friend – get the lowdown on what they offer in this video.

Laura Howard: Before July 1st 2014, the maximum you could save into an ISA was £11,880. Only half of that – that’s £5,940 – could be held in cash, with the other half held in stocks and shares. Otherwise the whole lot could be held in stocks and shares.

Now the new ISA – or NISA – has landed, this maximum allowance has risen to £15,000, and you can choose to save the entire allowance in cash, if you want to. This is great news for people who don’t want to take a chance with their savings on the stock market.

The other good news is that if you hold stocks and shares within an ISA, you can now transfer those into cash. Previously you were only able to transfer cash into stocks and shares, but not the other way around.

If you hold cash within a stocks and share ISA, which you haven’t yet invested, the interest you earn now it is a NISA will be free of tax. Previously, if you hadn’t invested within a certain time limit, it was subject to 20% tax.

If you’ve got a cash ISA already, but it is a fixed rate ISA, the chances are you’ll be able to top up to the new £15,000 limit. But each provider is imposing different deadlines, so it’s important to check and find out when this deadline is as soon as possible. Call your provider, or look online, and see when the deadline is because some are as early as July 31 and you don’t want to miss out on all those extra tax-free savings.




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