You can’t turn your head without reading or hearing the word “Brexit”. While the hastily bashed together portmanteau has become something no one can go a day without saying, there is one exciting area that has been fun to track as 2019 has trundled along.
That world is the simple life and time of the ISA. The simple savings account has been having a bit of a resurgence as many of us hunker down and try to get savings in order. As the HMRC has declared over £78 billion has been invested in ISAs since being introduced in 1999, the slow behemoth shows no signs of being derailed by Brexit.
But just how safe can having an ISA in times like these be? Here are some reasons why those who are on the fence right now may want to jump on it.
More of us are getting ISAs
You know something is popular whenever 28% more people are doing it year on year. That’s precisely the level of growth Scottish Friendly, according to FT Adviser, has seen of new users in the last year. Many of those people investing in ISAs are also looking for a bit of luck by eschewing cash ISAs in favour of stocks & shares ISAs.
Would that be seen as risky with the UK stock market waiting on Brexit with bated breath? Well, not really. The majority of companies which stock ISAs invest in will be on the exchange, but they aren’t all domestic companies. Self Trade reports that nearly 75% of earnings from FTSE 100 companies are doing so in dollars outside the UK.
It all of a sudden makes the idea of tax-free savings here, on non-domestic trades, seem more of an incentive.
More of us want to save on tax
Show me someone who actively wants to pay more tax, and I’ll tell you they’re a liar. ISAs rose to prominence in the mid-2000s due to their fantastic tax-saving benefits for first-time buyers. And while it may not have the same allure as house prices keep rising and less can afford to buy, it is still a savvy way to save on tax.
The threshold for investment on a traditional ISA still remains at £20,000 per tax year, with a more significant majority of that remaining tax-free and not subject to something like the taxes a bond (even though it’s from the Government) has imposed on it.
Any chance to save always has to be taken up.
More of us want long-term planning
Plant a saving’s seed and wait for the tree to grow. If the last decade of payday loans and high lending rates taught us anything, it’s that long-term financial planning will always be in our favour.
So even if the market takes a dip if and when Brexit finally happens, those who are smart enough to hold out and ride through the cycle on their investment should get the expected results from their ISA.
More of us do our research
I can remember when Amazon first became a big thing here in the UK. Every single time you ordered something, the packaging would have at least three offer slips inside for everything from cheap wine to shoes. ISAs were a familiar mainstay in there too.
And with Amazon shopping creating the rise of the review based shopping system, users are expecting more information on the web from what ISA services are like and which companies have your interests in mind.
Take something like the Scottish Friendly overview on ISA.co.uk which gives those new to the world a clear picture of what opening an ISA is like, how it stacks up to other providers and why it will work for some people over others.
Sites like these help demystify the process and help make understanding savings much more straightforward.
So are ISAs Brexit-proof?
As long as they remain a viable investment path for you, then they will be.
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