Skandia To Boost Cash ISA Offering

By Editorial 08 April, 2014

Skandia, part of Old Mutual Wealth, has confirmed it will enhance the interest rate offered on cash deposits under the UK's Individual Savings Account (ISA) initiative in time for the new rules in July.

The UK government introduced the ISA in 1999 as a tax-exempt method of saving. It unveiled changes to the ISA rules in this year's Budget, increasing the investment limit to GBP15,000 (USD24,885) per year, and allowing investors to switch between an allocation to stocks and shares investment and cash. Under the changes, the full amount, GBP15,000, can be invested in one or other option.

Skandia specializes in stocks and shares ISAs but is expanding the amount of time that depositors can have money invested in a cash ISA as well as the rate it offers. Skandia said that it will make cash available as a longer term holding, rather than a short-term cash deposit facility, and has also increased the interest rate on cash investments from 0.1 percent to 0.4 percent.

"We are confident, just days after the changes were announced, that our ISA will be ready for the new regime in July," Mike Barrett, platform manager at Skandia, said.

"98 percent 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 July 1, regular savers can take advantage of the increased limits now by increasing their monthly contributions to GBP1,250 from Monday April 7, 2014."

Tags: Tax | Investment | Interest | United Kingdom | Regulation | Expats |


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