Skandia to enhance cash option in time for new ISA rules
Skandia is to enhance the cash option available on its ISA in time for the new rules in July.
Skandia will make cash available as a longer term holding, rather than a short term cash deposit facility, with the interest rate rising to 0.40 per cent in time for the new tax year, up from 0.10 per cent.
Skandia is looking to secure the highest interest it can in time for the changes on 1 July.
The changes announced in this year’s Budget mean that from 1 July 2014 people can invest up to GBP15,000 per annum in an ISA split as they choose between stocks and shares and cash.
Under the new rules investors will now be able to switch back and forth between the different asset classes, rather than having to disinvest from a stocks and shares ISA if they want to transfer to cash. This will offer investors greater flexibility to move between cash and other assets within a single product.
Mike Barrett, platform manager at Skandia, says: “We are confident, just days after the changes were announced, that our ISA will be ready for the new regime in July. In addition to a wide range of funds, our cash facility will be enhanced so that it will offer the most competitive rate possible.
“Ninety eight per cent of advisers tell us that ISAs are the most effective tax allowances used by their clients. The new rules show the government is acknowledging this popularity and answering demand for further flexibility. The changing structure is not only great for seasoned ISA users, but also for those who may have previously been hesitant to invest in the stock market as it allows them ‘dip their toe in the water’ within a single product.
“Whilst the new ISA regulations do not come in until 1 July, regular savers can take advantage of the increased limits now by increasing their monthly contributions to GBP1,250 from 6 April.”
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