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4 Reasons to Save with an ISA
An ISA is a way to store away money to earn interest or dividends
without getting taxed on your earnings.
According to most financial experts in the UK, an ISA is an absolute
must for nearly every Brit today.
What can an ISA do for you? Consider these opportunities for
using ISA funds to your fullest advantage.
Saving for a Rainy Day
The money in a cash ISA can be withdrawn at any time, as long as the bank and account you choose
offer liquidity-based terms.
This means you can put money away for emergencies, without the worry of paying taxes on interest
you earn.
This is also a good way to invest in the stock market and not have to worry about paying capital gains
taxes on your earnings.
You can capitalize on your investment and enjoy the full fruits
of your labor without having to send a dime of your investment to
the taxman.
This allows you to invest as you see fit, and you can sell your shares
when you need money for expenses of any kind.
College Tuition
If your children’s thoughts are beginning to turn to ivy-covered
campuses, you can be ready to pay the bill with the right ISA
investment.
If you can afford to save for a longer period of time, try
purchasing shares ISAs that offer a greater return potential.
If your children are nearer to college age, a cash ISA with a
competitive rate may be just the ticket for saving for those years of
higher education.
In addition to the ability to stash money away for tuition, you enjoy the tax break on your earnings that will make college just a little more
affordable.
Retirement
Many investors are moving from the traditional pensions to ISAs for
a number of reasons.
First, ISAs offer more flexibility and options than pensions, providing a greater potential for earnings and
the ability to customize your savings to your specific needs.
You can save money in an ISA until you get closer to retirement age and then determine whether it makes more sense financially to leave your money where it is or move it to a pension to receive a
pension credit.
The other advantage to an ISA over a pension is that money can be
withdrawn prior to retirement age without penalty if necessary.
Of course, less money in the ISA at retirement affects your quality of
life during this stage; withdraw with utmost care and only for very compelling reasons, if the purpose
of your ISA is to support your retirement years.
Life Assurance
When you purchase a stocks and shares ISA, you can include life
assurance in the mix.
This provides you with the opportunity to earn tax-free returns
on your initial investment, as well as taking out a life assurance policy
that protects your family in the event the unthinkable happens to
you.
To find a shares ISA that incorporates life assurance, talk to
your financial advisor.
There are many ways to use your ISA funds, whether you invest for
the short term or over the long term.
With so many options for your ISA money, it is no wonder this product
is so widely recommended by financial experts today.
4 Reasons to Save with an ISA