A simple way to maximise your ISA

Whether you’re saving for retirement, a well-earned holiday or a rainy day, building up a nest egg requires sacrifice.

After patiently watching your cash pile grow, the last thing you want is for your savings to lose value in an account you thought was protecting it.

At nearly 20 years old, there’s no denying an ISA is still the most simple, tax-efficient place to keep your cash. Each year, adult savers can keep up to £15,240 in their ISA tax-free. This annual allowance has increased from £7,000 at launch and will jump again to £20,000 from next April.

But the financial landscape has shifted over the last two decades and the allure of the traditional Cash ISA has diminished in favour of its Stocks & Shares cousin.

With interest rates of over 5% in 2008¹, savers were rewarded handsomely with bumper variable ISA rates of over 6%². Today, it’s a very different story. With interest rates at a record low of 0.25%, the best easy access ISA rate is now just 1.01%³, meaning you could make just over a pound if you put £100 away for a year.

With inflation set to run at 2.4% this year⁴, this £100 is likely to have less purchasing power in 12 months’ time.

Compare this to the 20% the FTSE 100 has made over the last year and a Cash ISA probably isn’t as safe as you’d have liked. After the hard slog of building up your savings, you don’t want its value to crumble away in a savings account.

Make your savings sweat

It’s time to make your money work harder for you – although you don’t need to break into a sweat in the process.

You can maximise your returns on market fluctuations by investing through a Stocks & Shares ISA. With the same annual allowance as the Cash ISA, investors can keep up to £20,000 tax free in their ISA from April 2017.

Picking a successful portfolio yourself isn’t easy; when investing in equities, for example, you need to know exactly how a company makes its money, you need to know industry trends inside out, and you need to understand basic multiples like the P/E, EV/EBITDA, P/NAV- and that’s just the beginning. Some investors like the complexity of the challenge, others would rather leave it to the experts.

If you fall into this latter group, low-cost digital wealth managers like Moneyfarm could be for you. Simplifying the investment process, the Moneyfarm platform offers diversified portfolios of exchange traded funds. Managed by a team of professionals, your portfolios are tailored to your financial understanding and appetite for risk.

It’s a popular myth that a Stocks & Shares ISA locks your cash away, making it inaccessible at short notice. At Moneyfarm you can get your money back in a week, so there’s no excuse not to go on that holiday.

There’s never been a better time to start investing. If you transfer or invest £10,000 into a Moneyfarm ISA before 1 May 2017, Moneyfarm will manage up to £20,000 (next year’s entire ISA allowance) free from management charges for one year. This is an additional £10,000 on the £10,000 Moneyfarm usually manages for free.

Investors will also receive a £200 voucher after three months of funding their Moneyfarm ISA.

1)Bank of England, Official Bank Rate History,
2)Best Cash ISAs for 2007, This is Money
3) Top Cash ISAs 2016/17,
4) OBR


By making an investment, your capital is at risk. The value of your Moneyfarm investment depends on market fluctuations outside of our control and you may get back less than you invest. Past performance is no indicator of future performance. The tax treatment of a Moneyfarm Stocks and Shares ISA depends on your individual circumstances and may be subject to change in the future. You should seek financial advice if you are unsure about investing in an ISA.

The contents of this article are for reference purposes only and do not constitute financial or legal advice. Independent financial or legal advice should be sought in relation to any specific matter. Articles are published by us without any knowledge or notice of the circumstances in which you or anyone else may use or rely on articles or any copy of the information, guidance or documents obtained from articles. We operate and publish articles without undertaking or accepting any duty of care or responsibility for articles or their contents, services or facilities. You undertake to rely on them entirely at your own risk, and without recourse to us. No assurance of the quality of articles is given or undertaken (whether as to accuracy, completeness, fitness for any purpose, conformance to any description or sample, or otherwise), or as to the timeliness of the publication.

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Mother of three grown-up daughters I am the ultimate multi-tasker and am passionate about my role as Silversurfers Website Editor and Social Media Manager. Always on the lookout for all things that will interest and entertain our community. Fuelling fun for the young at heart!

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