Are you making the most of your ISA subscription allowances?

While recent restrictions may have delayed plans for many of us, they have certainly not put any delay on time as we find ourselves already a 3rd of the way through the 2021/22 tax year.


There is no time like now to remind ourselves of our tax efficient investment friend the Individual Savings Account, more commonly referred to as the ISA.


ISAs have seen various forms over the years however mainly cash ISA vs stocks & shares ISA.


ISAs work like any normal savings account, except you do not pay any UK income or capital gains tax. They are therefore one of the most tax efficient saving vehicles for those seeking capital accumulation or income.


Unfortunately, interest returns on cash ISAs remain quite unattractive with the average rate on record for May 2020 of 0.91% for a one year fixed ISA. At this rate a £10,000 investment could achieve interest of £91.


We therefore need to look at the suitability of stocks & shares ISA particularly over the longer term in order to seek greater returns for future investment growth and protection against inflation.


Adult ISA market and the impact of inflation


Latest figures put the market value of adult ISA holdings in the UK at £620 Bn. cash ISA holdings represent 51% of this market value vs 49% is held in stocks & shares ISAs.


With the CPI rate of inflation recorded as 2.4% for June 2021 and your average one year fixed cash ISA interest rate of 0.91% your real return from cash ISA savings was -1.49%.


Against the market value of £316.2 Bn in cash ISAs, that’s a staggering £4.71Bn loss in spending power against the price of goods.


What are our ISA subscriptions limits?

Whether you’re contributing to a cash or stocks & shares ISA, due to the tax advantages there are limits to the amount an individual can pay in.

Adult ISA subscription allowance for 2021/22: £20,000

Junior ISA subscription allowance for 2021/22: £9,000



If you would like any further information on ISAs Click Here or to discuss how these could be a beneficial part for your future financial journey, visit or Contact Us for a free consultation with Alex.


Written by Alex O’Neill DipPFS, IFA at Beesure Financial Planning

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Photo by Sarah Agnew on Unsplash

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