Latest news with #IndividualSavingsAccount
Spectator
18-05-2025
- Business
- Spectator
Why Reeves should be wary of changing cash ISAs
Shrewd parents extol upon their children the importance of stashing away some cash. Unfortunately, they rarely offer much guidance on what to actually do with that money. As a result, much of it gets squirrelled away in pink, ceramic pigs where inflation eats it up. Many adults make the same mistake as these young savers. The more savvy ones opt to invest, perhaps in an Individual Savings Account (or ISAs), which are tax free savings accounts that let you save up to £20,000 every year, usually in the form of cash or stocks and shares. But it's widely reported that the Treasury is considering a radical shake up of the market by lowering the amount savers are allowed to deposit in cash.
Daily Mirror
28-04-2025
- Business
- Daily Mirror
British teens don't know how to save money and their parents are paying the price
New data has revealed that teens are falling short when it comes to financial comprehension. As a result, parents are taking responsibility for their teens' financial wellbeing A new survey conducted by Perspectus Global reveals that British teens are not saving their money. While that statement alone may not be surprising to some, the survey also shows that British teens do not just fail to save money, they don't know a whole host of personal finance basics, including the lingo. One reason Gen Alpha may not feel pressure to take charge of their financial future could be that their parents are committed to planning it for them. The survey of 1,000 British parents of teens revealed they are saving money on their children's behalf and, relatedly, do not feel confident about their children's ability to save for themselves. The data found that one in five surveyed teens did not know what the term 'inheritance' meant while others were unfamiliar with the terms ISA (Individual Savings Account) and national insurance. The survey focuses on the buzzy new consumer group termed Generation Alpha - individuals born after 2010. The research commissioned by Moneyfarm surveyed 1,000 British teens aged between 13 and 19 as well as 1,000 British parents. The March 2025 report found that 14% of British teens did not have any savings, including anything in a bank account or a pre-paid debit card. A whopping 84% of parents said that their child would have access to money that they saved for them when they turned 18 - with the average amount being £23,000. While certainly a significant figure, parents saving money for their children is not a new phenomenon and nearly a quarter (24%) of surveyed teens said that they would use a large gift of money at 18 to fund their university education. Of the 1,000 teens surveyed, 35% also admitted that any money they did receive, they spent immediately. While this held true for all genders, the survey did find that what teens spent their money on differed between boys and girls. Most of the surveyed boys were likely to spend money on gaming, whereas the majority of girls said they spent their money on clothing purchases and beauty. Other big spending categories for teens include takeaways, nights out, skincare and music. Though Gen Alpha's savings apathy may not be all that surprising when compared to their predecessors. Gen Z has faced its fair share of financial shaming, accused most recently of 'doomspending'. According to Fortune, Gen Z is dealing with the seemingly insurmountable financial odds against them by spending money on travel and short-term goods. It should also be noted that while teens may lack financial literacy, they have a desire to grow their knowledge and confidence. While over a third of surveyed teens admit they don't feel confident about managing their money in the future, 32% said they would love to learn. And for their part, parents are making a conscious effort to educate their teens, with 82% saying they are consciously trying to teach their children about managing finances. While the world of finances can be daunting, saving money can start small. Opening up a cash ISA and savings account can open up a wealth of cost-savings schemes. Martin Lewis recently explained that by opening any Santander savings account or cash ISA, people aged 16-25 could be eligible for a free four-year railcard worth £100. According to Lewis, by paying at least £50 by May 31, 2025 and keeping it in your account for at least a month you'll be sent a code to redeem your railcard. That said, it is up to more than parents and teens to prioritise financial education. In March, Conservative MP Peter Bedford brought forward a motion in Parliament to introduce a bill to make provisions around financial education in primary schools and tertiary education. Speaking in Parliament on the issue, Bedford said: "Schools should prepare young people for the adult world. Yet for all the focus on balancing an equation, there is no attention given to balancing one's bank are sending our young people out into the world and putting them into the game of life without even teaching them the rules first."
Scotsman
28-04-2025
- Business
- Scotsman
Challenging youngsters to save
The Brownlee brothers | Supplied Young people are prioritising medium-term investments, like starting a business, over long-term goals, such as saving for a house deposit, according to new research. Sign up to our Scotsman Money newsletter, covering all you need to know to help manage your money. Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... A study of 2,000 young people aged 18 to 35, commissioned by NatWest to launch a youth-focused savings challenge, has revealed a notable shift in the savings aspirations of the younger generation when compared with those of their parents. It found younger people are more likely to prioritise saving towards travelling, attending festivals and wellness, leaning towards spontaneous life experiences over longer-term financial goals. Advertisement Hide Ad Advertisement Hide Ad Some 2,000 British adults aged 18 to 35 years old were surveyed by OnePoll, commissioned on behalf of NatWest, in February this year. The research revealed that while conventional savings goals are still part of young people's financial picture, priorities have shifted. Some 29 per cent of young adults who are saving towards long-term goals are allocating 20 per cent or less of their savings towards this, with 50 per cent being focused on medium-term objectives. NatWest is encouraging young people to build healthy monthly savings habits by launching Couch to Cash: the £5K Challenge. To accompany the challenge,Team GB Olympic gold medallists Alistair and Jonny Brownlee, have created a video series featuring helpful tips to tackle the key barriers to young people saving more. The study highlighted the shift in savings priorities compared to previous generations, with almost half of young people today believing their savings ambitions differ from their parents' goals at the same age. Some 47 per cent said their parents would have allocated a greater percentage of income to long-term goals than their offspring are currently, and 37 per cent believe all of their parents' savings would have gone towards saving for long-term objectives, such as buying a home or paying for a wedding. While almost three-quarters believe they would benefit from new saving strategies to reach their goals, only a third of 18 to 35 year olds had put money into an Individual Savings Account (ISA) ahead of the tax year deadline. Advertisement Hide Ad Advertisement Hide Ad Despite this trend, the majority of respondents (74 per cent) concede that they would like to save more towards their long-term goals. Mo Watt, savings expert at the NatWest Group, believes the bank's research sheds welcome light on the generational shift in attitudes to saving .She adds: 'At NatWest, we know that regular savings – no matter how big or small – can add up to make a big difference down the line.'Couch to Cash: the £5k Challenge aims to provide useful tips for those who are looking to get started or want some additional structure to their savings journey. 'Our NatWest Savings Goal Tool can create a plan to help you achieve your goals, whether that's in the short, medium or long term.' Advertisement Hide Ad Advertisement Hide Ad The bank says that the challenge aims to help young people set realistic savings goals to reach their target – whether that's £5,000 or a more modest or ambitious amount – based on how much they can afford and how quickly they want to reach their goal. NatWest customers can use the Savings Goal Tool app to schedule regular payments and track their progress. Top-ten mid-term savings goal According to the recent research published by NatWest the top-ten mid-term savings goals for young people are: 1 Travelling (39%) 2 Starting a business (24%) 3 Home decor (23%) 4 Investing in the stock market (22%) 5 Health & wellness retreats (20%) 6 Luxury travel experiences (20%) 7 Investing in cryptocurrencies (18%) 8 A wedding (15%) 9 Buying an electric car (13%)
The Independent
24-04-2025
- Business
- The Independent
Six ISA mistakes to avoid this tax year - from choosing the right account to tracking your fees
A new tax year has started, giving savvy savers and investors a fresh £20,000 annual allowance to put in an Individual Savings Account (ISA). It is important, however, to choose the most appropriate ISA and investments for your strategy - otherwise you could end up with an inappropriate product that doesn't match your risk appetite, or even loses money. Laura Suter, director of personal finance at AJ Bell, said: 'Anyone who has an ISA will know they are a great way to protect your savings and investments from tax, and to grow your wealth over time. But even the savviest of savers can slip up when it comes to the rules or make some common ISA mistakes that may cost them.' Here are seven ISA mistakes to make sure you avoid when making use of your tax-free allowance. ISAs to choose from - so it can be easy to pick the wrong one for your savings or investments. Ms Suter said: 'It might be that you've opted for a cash ISA, but you're saving for the long term and an investment ISA would be a better option. 'Or you may have picked a stocks and shares ISA to save for the deposit for a first home, but you could have benefitted from the government bonus available on the Lifetime ISA. Equally, if you're saving for your child you will want to at least consider a junior ISA, rather than automatically saving the money in your own ISA. 'Not every option will be right for you, and you need to check the details of each account.' The key here is long-term, says Camilla Esmund, senior manager at interactive investor, because both stocks and shares and cash ISAs hold an important place in the savings and investing landscape. 'There is no denying the allure of cash, and that it will indeed be suitable for some people's financial goals and circumstances. If in doubt speak to a financial adviser, but our research illustrates that over the long term, it is costly to ignore the stock market as it gives your money more chance to grow over time. Inflation erodes the value of cash over time, and cash rates fluctuate.' It is human nature to leave things to the last minute but Jason Hollands, managing director of Bestinvest, says the earlier you open an ISA during the year, the more time your money has to grow or earn interest tax efficiently. He said: 'If you don't have a big chunk of cash available now, then why not consider saving regularly through a monthly direct debit? This is a very good discipline, which is both easier on your cash flow situation and for investors can help iron out the effect of market ups and downs.' With frozen personal tax thresholds, the more you can shelter from the taxman through savings, the better. It is importance to diversify your investments when using a stocks and shares ISA as you don't want all your money in the same type of company or region. But there is a downside to too much diversification. Mr Hollands added: 'I've seen DIY investor portfolios with up to 75 funds. You want high conviction in your holdings, with each able to make a meaningful contribution to returns. There isn't a magic number on how many funds should be held but given each will typically have exposure to anywhere between 30 and 1000 underlying investments, you can achieve reasonable diversification with half a dozen funds providing they are all doing slightly different things.' With his own personal rule being to set an upper limit of no more than 20 funds in total, he added it 'forces you to think about what you already own and whether you still have conviction in these' when considering adding new funds. 'If you conclude you are confident in what you already own, then just top up existing holdings rather than constantly adding new ones,' he said. Not reviewing your current portfolio Along the same lines, don't forget to periodically review what you already hold. Just because something made sense last year doesn't mean it's still the right fit. Some parts of your portfolio may even be underperforming so it is important to understand why that may be. Nick Winter, financial planner at Quilter, said: 'That doesn't mean you should constantly tweak your portfolio in response to short-term market noise. Your ISA should be built around your long-term goals, and making small changes every time the market moves often does more harm than good. The best results tend to come from staying the course with a well-diversified plan rather than trying to time the ups and downs.' Panicking about market downturns Stock markets will have their ups and downs but cashing out too early can mean missing out on a market rally. James Norton, head of retirement and investments at Vanguard Europe, said: 'Successful investors are those who manage to ride out the market falls, remain focused on their goals and stay invested for when markets recover. 'Of course, it helps to stay informed about market news but try not to let it dictate your decisions. Major global events have historically impacted stock markets, but they recovered from these shocks and went on to reach new highs.' Norton warns that while downturns can be scary, reacting emotionally can lead to poor decisions, such as selling your investments at a loss. You may not be able to control the markets but you can have a say in how much you pay. Fund and platform fees can easily eat into your profits if not checked. Suter added: 'Paying some fees is part and parcel of investing, but one ISA mistake to avoid is paying out too much in charges, as ultimately this will eat into your returns. There are some easy ways to cut your costs, without cutting the investments or service you get. The first is to make sure you're not buying and selling investments too often. With lots of platforms each time you buy and sell it will cost you money. Having more than one platform you use for investing can also see fees stack up - so make sure the accounts you use are serving the right purpose in a cost-effective manner. When investing, your capital is at risk and you may get back less than invested. Past performance doesn't guarantee future results.
The Independent
15-04-2025
- Business
- The Independent
The best cash Isas to open in April 2025 to maximise your tax-free savings
SPONSORED BY TRADING 212 The Independent Money channel is brought to you by Trading 212. Millions of UK savers looking to boost their tax-free savings have now opened a Cash Isa. This special savings account allows people to deposit tens of thousands and saves them from paying tax on the returns, making it an increasingly popular choice alongside regular savings accounts. With the number of people now using Cash Isas, the amount of providers for them has only increased. Big name banks and smaller finance platforms are ramping up competition in 2025 to offer the best interest for savers. Here's everything you need to know about Cash Isas and the best deals on the market. What is a cash Isa? A cash Isa is very similar to a savings account, but with one key added benefit: you will never pay tax on it. Everyone adult in the UK gets an Individual Savings Account (Isa) allowance of £20,000 at the start of each tax year in April. Also similar to normal savings, there are different types of cash Isas to choose from. Some are easy access, meaning the owner can withdraw from them at any point. Others are fixed rate, guaranteeing interest which is usually higher, but locking in the cash for a set period of time. There are other types of Isas too, including Lifetime Isas and stocks and shares Isas, which allow for investing. It is also important to note that you don't need to pick just one. Savers are allowed to open as many different kinds of Isas as they like – the £20,000 tax-free allowance will be spread between them - though some have restrictions within that. What are the best cash Isas on the market? Cash Isas are currently offering some of the best interest rates of any UK savings accounts. This makes them a good option for anyone looking to save under £20,000 this year – or happy to diversify cash to other accounts upwards of that amount. Here's your guide to some of the best cash Isas on the market at the time of writing; rates and products are always subject to change. Best easy-access Cash Isas Moneybox Cash Isa The flexible Cash Isa from Moneybox comes with an interest rate of 5.71 per cent, including a bonus 1.51 per cent for the first three months. However, this interest rate will be slashed if you make more than three withdrawals within 12 months, or if the balance of the account falls below £500. The underlying rate is 4.2 per cent. Plum Cash Isa Financial technology company Plum also offers a Cash Isa at 5.68 per cent, which includes a 2.14 per cent bonus for new customers who keep the account for at least three consecutive months. The bonus is only for three months though, leaving a 3.54 per cent after that period. It's important to note that this rate will drop to 2.5 per cent after four withdrawals, or if the balance of the account falls below £100. Trading 212 Cash Isa Investment platform Trading 212 offers a Cash Isa with an interest rate of 4.5 per cent for all customers - though readers of The Independent can also get an exclusive promotional rate of 4.9 per cent on the platform. There is no minimum balance or limit on the number of withdrawals you can make on this Cash Isa and it is a flexible Isa. Tembo Cash Isa Savings and mortgage platform Tembo offers a Cash Isa at 4.8 per cent, with no hidden bonus rates for new savers or penalties for withdrawals or going below a certain amount. Chip Cash Isa Savings and investments app Chip is currently offering a flexible Cash Isa with a 4.32 per cent interest rate for new and existing customers. Their base rate stays 0.26 per cent under the Bank of England base rate - so this overall rate could reduce as early as 8 May. Is my Cash Isa safe outside of a big name bank? Most of the best Cash Isa interest rates are offered by platforms and services that aren't as well known as the big name banks. This can be a cause of concern for some people, which is perfectly valid as these platforms have not spent the years building up the trust and customer that some of the big banks have gained. When you deposit funds for a Cash Isa into one of these smaller platforms, they will usually put the money into a 'client money account' which is actually generally held with one of the bigger banks. This ensures that it is protected under the Financial Services Compensation Scheme (FSCS) for up to £85,000 per person, per bank. This broadly applies to all of the recommendations in the list, but there are some small differences between each. It is essential to always read the small print on any financial service you are interested in to ensure you understand exactly what is happening to your money - and be aware changing interest rates at the Bank of England can impact the rate you receive if you don't choose a fixed-rate product. When investing, your capital is at risk and you may get back less than invested. Past performance doesn't guarantee future results.
