Thursday, 31 July 2014

Is Now The Time To Save Money

Each of my children has a bog standard saving account set up. All family members put money into them at various times of the year. We are hoping this will be a nice little nest egg for them when they turn eighteen. Whether it be money for driving lessons, deposit for a house, a new car, it is just nice to think that they won't have to struggle to pay for everything like my husband and I have in the past.

Now the silly thing is, is that we have these accounts set up for the kids but we don't have a savings account set up for ourselves, I think purely because we never seemed to have money spare at the end of each month to put aside.

Over the years our budgeting has got better and with my husband now in a better paid job we have recently started looking into opening up an ISA.

I don't know if you lot know but on the 1st of July this year, ISAs became known as new ISAs, NISA.

In simple terms, essentially they are still the same thing, tax free of tax effiecient accounts for your savings of investments. They are a way of increasing your returns by paying little or no tax.

I'm not clued up when it comes to money so I wasn't sure what the differences were between an ISA and a NISA?

After a little research I found there are a few changes to the limits of how much you can save and the regulations involved.

* You can save 15,000 tax free in a cash NISA

* You can split your savings between cash and stocks & shares

* Some providers will even allow you have your cash within your stocks & shares, all in one.

Now I'm left with the decision on what to do with my money, do I save purely in cash or do I invest??

Neil Lovatt, Scottish Friendly's director of Financial Products said "For every one investment ISA taken out, three cash ISAs are open?

So does this mean a cash NISA would be better? Apparently not.

piggy bank

Although cash is easier to understand for most, from what I can gather it depends on how much you earn and how much you can put aside to whether you would be better off picking a Cash NISA, an Investment NISA or a mix of both.

Cash NISAs tend to have lower interest rates and some saving providers have actually started to lower these rates further because of the launch of NISA.

Scottish Friendly are recommending that people should consider the alternative funds available through NISA investments before automatically holding all the funds in cash.

There are new NISAs out there that offer a balance of investments including stocks and shares, cash, fixed interest and property funds.

Higher rate tax payers would certainly benefit splitting there money between cash and investing and if you are a big investor then Investments NISAs would seem to be the more obvious choice.

Researching has certainly opened my eyes to the types of counts available and just how many companies are there to help.

I suppose as the saying goes, "you've got to spend money to make money".

What are your thoughts on the new NISA, have you already opened an account, do you think investing is a good idea??

xxxx

This post was written in collabaration with Scottish Friendly

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