Key changes to stocks and shares ISAs in 2024
With the end of the tax year fast approaching, IG’s Portfolio Manager, Martin Harris, sat down with IGTV’s Angeline Ong to run through the three key changes to ISAs for 2024 and which IG products are available.
(AI Video Summary)
The three key changes to ISAs for 2024
Starting in April, there will be three important changes to ISAs in the UK that you need to know. Firstly, the amount of money you can invest in an ISA each year will remain fixed at £20,000, despite the fact that many expected it to increase due to inflation.
Secondly, you will now be allowed to open multiple stocks and shares ISAs within the same year, as long as you don't go over the £20,000 limit. This means you can choose different providers, styles, and investment portfolios to suit your needs.
The third change is called 'flexible transfers', which means you can now transfer only part of your ISA balance instead of having to transfer the whole amount. So, let's say you have £10,000 in one ISA and you want to move some of it to another ISA, you can now leave some money in the original account and only transfer a portion of it to the new one. This gives you more control over your ISA funds.
What do these changes mean?
These changes bring more competition to the ISA market, which is good news for consumers like you and me. It's also worth noting that having investments within an ISA is a smart move because it lowers your taxable income. The new rules make it even more important to have an ISA because there are less options outside of an ISA to avoid taxes.
What types of ISAs does IG offer?
At IG, there are different types of ISAs to suit your needs. IG has individual stocks and shares ISAs for those who want to choose their own investments, and also offers managed accounts called smart portfolio ISAs, which invest your money in a mix of fixed income, equities, and other opportunities like commodities. If you're interested in pension-related investments, IG also has self-directed pension investments available.
The type of investments you choose and the timeframe you have for your investments depends on your own goals. If you have a long-term outlook, it's important to consider the tax advantages of an ISA as compounding returns over time can potentially lead to higher tax liabilities. People who earn a high income should also consider using their pension to lower their taxable income before investing in an ISA. On the other hand, if you make short-term gains, like a 40% increase in a particular stock, these gains can lead to significant taxes outside of an ISA, but not inside.
Overall, ISAs are a great way to take advantage of tax benefits and should be a priority for any investor.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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