January 2021

Don’t forget that you only have until the end of the tax year (Monday 5 April) to invest tax efficiently by using your Individual Savings Account (ISA) allowance. If you have cash that you won’t need to access in the short term and would like to use some or all of this year’s ISA allowance, don’t leave it too late or you could risk missing out on this opportunity to save tax-efficiently; remember that timing is important as you can’t carry any unused allowance over to the next tax year.

For 2020/21, the ISA allowance is £20,000, or £9,000 if you want to save tax-efficiently for a child using a Junior ISA (JISA). You can put the full £20,000 into a cash ISA, or invest the whole amount in a stocks and shares ISA. If you prefer to mix and match, by investing into both equities and cash, you can do so, providing the total combined amount doesn’t exceed your annual allowance.

Now, more than ever, you need to make sure your savings give you the best possible return. Putting money aside tax free is an easy way to make your savings work that bit harder and is especially useful for those in higher tax bands who don’t benefit from the Personal Savings Allowance. Are you benefiting from reduced childcare costs at the moment? With many after-school kids’ clubs off the agenda, why not use the average spend of £57.36 per week, totalling almost £2,200 over the course of a 38-week school year, to invest in your child’s future via a JISA? It all adds up.