ISA and Junior ISA allowances

ISA and junior ISA allowances

For the Tax year 2012-2013 the ISA allowances have all increased. The annual ISA allowance is now £11,280 per person. A couple can invest this amount each and for children under the age of 18 £3,600 can be invested on behalf of each child. So, for a couple with two children a total of £29,760 could be tax sheltered in ISAs this year.

Remember, you do not have to invest a lump sum into an ISA. As you are probably aware, timing is the thing with stock market investments. If you feel happier “drip feeding” money into the stock market, then you can pay regular amounts in monthly until you reach your overall ISA allowance. Often this is a sensible thing to do anyway, as you benefit from what they call “Pound cost averaging”. Simply put, this means that as stock prices fluctuate up and down, you get more shares in the months the prices are down and less in the months the prices are up. It has the overall effect of spreading your risk.

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