ISA contribution limits
An ISA is an excellent way to save or invest your money without having to hand over a significant amount of your earnings to the taxman. However, the tax benefits also mean that you are limited in just how much you can put into one of the sheltered vehicles each year as well.
By gaining a thorough understanding of ISA contribution limits, you will be sure to enjoy the full amount of advantages these investment and savings vehicles offer.
Each year every eligible person may pay up to their maximum allowance into ISAs, To check the current ISA limits click here.
You are also limited in the number of ISAs you can have, each tax year each eligible person has the opportunity to open a cash ISA, a Stocks and Shares ISA or they can choose to open one of each ISA type. If they do open both kinds of ISA they will however need to break up their allowance between the two accounts, so they do not exceed it, they can however do so at a ratio of their choice.
It is actually a good idea to transfer ISA funds from time to time, to ensure you continue to earn the highest possible rate of return on your money. However, transfers must be initiated through the receiving institution to be legitimate. If you withdraw money from your current ISA on your own, it counts as a withdrawal rather than a transfer, and it is subject to the contribution limits if you try to put the funds into another ISA product.
Contributing to an ISA each year is an excellent way to earn a return on your investment without having to pay tax on your earnings. By understanding the specific rules governing ISA contributions, you can ensure you reap the maximum advantage out of your savings or investment vehicle.