Make structured savings this year
Although you may have just made a lump sum payment to top-up your ISA for the 15/16 tax year, the clock has now reset and you can start once again to contribute towards the maximum limit for 16/17, which is again £15,240. Making structured savings each month helps to save steadily through the year, whilst maximising the tax benefits of utilising the full ISA annual allowance.
ISA benefits for doctors and dentists
ISA’s continue to be an effective “tax wrapper” for most doctors and dentists, as a way to earn interest income free of tax.
There is a tax-free contribution limit each year and there is no facility to roll-forward unused allowances in this case, which is why maximising this allowance each year can be beneficial for most professionals with excess income.
How much can you contribute in 16/17?
The ISA allowance usually increases year-on-year, however more recently the government decided to link increases to inflation.
Due to poor levels of inflation, the allowance remains the same as last year, £15,240.
From 2017, the government though are planning to increase the limit to £20,000 whilst also introducing a new ISA product, the LISA.
These days ISA’s are much more flexible and contributions can be made into a Cash ISA, a Stocks and Shares ISA, or a combination. Transfers can usually be made between ISA providers and there are other regulations that help you to be able to invest and withdraw money through the year as and when required.
Making scheduled payments into an ISA throughout the year helps spread the costs and ensure that come the end of the year you will have maximised your ISA position.
Before you go…
Don’t forget to download our e-fact sheet with more information about ISA’s.
We can help answer any questions.
Dental & Medical Financial Services help doctors and dentists with setting up and managing their ISA in line with excess income and wider financial plans. Call Darren to discuss.
Tel: 01403 780 770