Latest news with #StocksandSharesISAs
Daily Mirror
13 hours ago
- Business
- Daily Mirror
Martin Lewis explains new ISA rule change for anyone with more than one account
Martin Lewis has explained how a change in the rules now means savers can take out several different cash ISAs or stocks and shares ISAs within the same tax year Money Saving Expert Martin Lewis has offered crucial guidance for individuals with more than one Cash ISA, in light of a recent change in government regulations. On the latest episode of The Martin Lewis podcast, the founder of MSE clarified to his listeners and co-host Adrian Chiles how Cash ISA rules now operate following a fiscal rule alteration in 2024. Previously, a long-standing rule restricted people to only one Cash ISA or Stocks and Shares ISA per year, but this has now been scrapped. This means savers can now utilise several different Cash ISAs and Stocks and Shares ISAs, including fixed-rate and easy access, all within the same tax year. During the July 5 episode of The Martin Lewis Podcast on BBC Sounds and Spotify, Martin Lewis explained: "Ever since ISAs were set up, there's been a limit on the amount of money you can have in, and you've been able to open a Cash ISA and a Stocks and Shares ISA in the same year. "But you've only been able to open one of each type. But, from April 6 2024, the rules were changed, and the restriction on subscribing to one ISA of each type, in a year, was removed. "You may now open as many different ISAs of one type, for example a Cash ISA, you can have a fix, and you can have two different Cash ISAs, all of which you've opened and put money into, within one tax year." There are whispers that changes to Cash ISAs could be imminent, after the government declined to dismiss a potential reduction to the limits in the future, reports the Express. Currently, savers can stash up to £20,000 into Cash ISAs within a single tax year, across various accounts. However, there's buzz that the government might slash this limit to as little as £4,000, potentially from 2026. This move could, insiders claim, nudge more Brits towards investing rather than hoarding cash in ISAs, with stocks and shares ISAs reportedly not facing the same cuts. Earlier in the year, money guru Martin weighed in on the potential changes, remarking: "The concept behind it is that it'd encourage people to put the money in shares ISAs instead (personally, I'm sceptical if it'd work - many will just keep saving but pay more tax). "Of course, everything is pure supposition - I doubt any firm decision has been made yet. But if it happens as rumoured, it WOULDN'T impact money already in cash ISAs, it'd just cut what you can put in, in future. "Whether it'd start immediately, or in January or April 2026, no one knows (including at this point, I suspect, Rachel Reeves). Yet if you plan to save in a cash ISA, all of this would suggest getting it in sooner would seem safer."
Yahoo
28-04-2025
- Business
- Yahoo
Here's how to try and turn an ordinary Stocks & Shares ISA into a small fortune
The Stocks and Shares ISA is an incredible vehicle for investing. No capital gains tax, no income tax. It's something that almost every investing Briton will attempt to use. And it's simple to set up. Almost every major brokerage in the UK provides access to an ISA wrapper. I'm led to believe that the average size of a Stocks and Shares ISA in the UK is £8,737. That's probably not a life-changing amount of money for most people. And that's certainly not going to provide enough income for someone to live on. So, how can an investor turn this ordinary ISA into something much larger? Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions. Simple steps To transform an ordinary Stocks and Shares ISA into a much larger pot, the first step is to consistently make use of the annual ISA allowance. For the 2025/26 tax year, this allowance is £20,000, and using as much of it as possible each year can dramatically accelerate the growth of investments. Regular contributions, even if they start small, can add up significantly over time thanks to the power of compounding returns. Another key strategy is to focus on long-term investing. Stocks and Shares ISAs are designed for longer time horizons — typically five years or more — which increases the chances of seeing positive returns compared to cash savings. By staying invested and avoiding the temptation to make withdrawals or react to short-term market volatility, investments have the best chance to grow through both share price appreciation and reinvested dividends. Finally, reinvesting dividends can supercharge an ISA's growth. Many companies pay dividends to shareholders, and by choosing to reinvest these payouts rather than withdrawing them, investors can benefit from compounding. Over time, reinvested dividends can make a substantial difference. This approach, combined with regular contributions and a long-term mindset, can help turn an average ISA into a much larger nest egg. Here's an example of how things can add up. The below assumes £250 of monthly contributions and an average 8% growth rate. Created at Stocks for the job If an investor already has a relatively diversified portfolio, including index trackers, funds, or maybe even just a good variety of stocks, they may wish to consider a stock like Jet2 (LSE:JET2). Why Jet2? Well, I believe it's one of the most undervalued and overlooked stocks on the British market.
Yahoo
02-03-2025
- Business
- Yahoo
£3k in savings? Here's how someone could start investing for lifelong passive income
One common way to earn passive income is to start investing in well-known shares that pay dividends. These are payments a company makes to its shareholders. Simply by owning shares in, say, Legal & General and JD Sports, I regularly earn passive income without having to lift a finger for it. Such an approach does not even need to be very expensive. In fact, it can be tailored to any budget. Here is how someone with a spare £3k could start investing like that. The scale of the passive income streams earned will depend on what shares the investor buys. Each company makes their own choice of what, if any, dividend to pay shareholders. They are never guaranteed. Imagine an investor spreads the £3k over a few companies with an average dividend of 5p a year for each £1 invested (what we call a 5% dividend yield). By spreading the money across multiple shares, the risk is reduced that one bad choice would stop all the passive income flows. That should produce £150 a year in passive income. For as long as someone owns a share, they are entitled to any dividends it pays. So investing the money today could lead to lifelong passive income streams. That £150 is an example, but the income could be higher. One way would be to invest in higher yield shares. But as dividends are never guaranteed, it can be a mistake to start investing in a company just because its current yield is high. A smart investor looks at a business and makes a judgement about what they think future dividends might be. So in this example, I will stick with 5%. That is above the current average FTSE 100 yield but I think it is achievable in today's market while focusing on quality blue-chip companies. If the investor waited a decade and during that time reinvested (compounded) the dividends, they would have a portfolio generating £247 of passive income annually. As an example of the sort of share an investor may consider, I would point to British American Tobacco (LSE: BATS). At 7.8%, its yield is actually well above the target I mentioned above. It also has an enviable record of annual dividend increases dating back decades. That might not last, of course. Cigarette sales volumes are falling in many markets, threatening both revenues and profits for the Lucky Strike maker. But it remains highly cash generative and has a portfolio of premium brands that give it pricing power. It is also rapidly expanding its non-cigarette business. I think the business can benefit over the long term from its global distribution network and manufacturing expertise. Of course, some investors may shun British American on ethical grounds. Something I like about investing is that we can each make our own decisions. To start investing the £3k in whatever shares they choose, the investor would need some sort of dealing account. So it makes sense to look at some of the different share-dealing accounts and Stocks and Shares ISAs on the market and compare them. The post £3k in savings? Here's how someone could start investing for lifelong passive income appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool C Ruane has positions in British American Tobacco P.l.c., JD Sports Fashion, and Legal & General Group Plc. The Motley Fool UK has recommended British American Tobacco P.l.c. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
