{"id":547,"date":"2019-07-12T04:27:35","date_gmt":"2019-07-12T04:27:35","guid":{"rendered":"http:\/\/www.development-work.com\/mydebt\/?p=547"},"modified":"2020-10-27T04:29:21","modified_gmt":"2020-10-27T04:29:21","slug":"whats-the-big-deal-with-isas","status":"publish","type":"post","link":"https:\/\/www.mydebtacademy.com\/uncategorized\/whats-the-big-deal-with-isas\/","title":{"rendered":"What\u2019s the big deal with ISAs?"},"content":{"rendered":"

Moving to the UK isn\u2019t as much of a culture shock as you\u2019d expect. Everyone here may drive on the wrong side of the road, and the metric system required some mental gymnastics for the first few weeks, but some things are actually much simpler, especially when it comes to money and saving.<\/p>\n

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*Quick Note: this article is intended for readers now living in the UK. Sadly there\u2019s no equivalent for saving in the US, and something like an Individual Retirement Account (IRA) would be as close as you get.<\/em><\/p>\n

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I recently was buying tickets for a concert online on Ticketmaster (Dawes if you were keen to know who), and whatever your views on the website, they can surprise you with a deal here and there. After buying the tickets, there was a pop-up offer to buy a box of fancy craft beer for just \u00a35 of New England style beers; beers that are more Harpoon Brewery than Sam Adams (I was shocked to find that Sam Adams sold over here is made in London). It was an offer too good to be true, so of course, I ordered it. When it arrived, in the box was all the lovely foreign beers I could sample, but there was also a bunch of leaflets too.<\/p>\n

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I\u2019m used to seeing leaflets prep services when you get something delivered or from listening to podcasts, but this box had a leaflet for an ISA company. I will admit that I knew absolutely nothing about ISAs apart from seeing them in ads and sometimes hearing about them on TV as the UK has shows dedicated to finance and savings that are helpful, and not at all like Mad Money.<\/p>\n

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This leaflet, in particular, was for a company called Scottish Friendly. Because I like doing my research, a spot of post beer Googling took me down a rabbit hole that led me to an FT article about how Scottish Friendly<\/a> is pretty popular and how ISAs aren\u2019t as scary as I thought. In fact, banks here love the idea of people saving money over using credit scores as a barometer.<\/p>\n

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If you\u2019re like me and are completely oblivious to the world of ISAs, fear not my friends!<\/p>\n

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I thought it would be a great idea to do a short post that shies away from debt advice and instead takes a look at how you can be a savvy saver when you get an ISA, especially if you\u2019ve moved to this side of the pond and are looking for ways to save money in the long-term.<\/p>\n

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In the simplest terms, what\u2019s the deal with ISAs?<\/strong><\/h3>\n

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Tax! ISA stands for Individual Savings Account. They are essentially the same as a bank account, only with more conditions in place. Someone would have an ISA if they were looking to save money and reduce the amount of tax they have to pay on that money. Everyone has a Personal Savings Allowance, which is meant to eliminate paying tax on savings income.<\/p>\n

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And why is a PSA important?<\/strong><\/h3>\n

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It used to be that people would get taxed on all their savings (terrible, right?). With the PSA, a normal taxpayer can get up to \u00a31000 a year now, and it won\u2019t be taxed as a means to encourage more people to start saving money, rather than money sitting in a current account.<\/p>\n

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So where does the ISA play into this?<\/strong><\/h3>\n

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Imagine you want to start saving money for the future. Back home all we really have are the 401K or IRAs. You can pop your money in a normal savings account, but it won\u2019t provide you with any major gains over timeas it has extremely low interest.<\/p>\n

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Instead, you can take some savings and put them in an ISA. This took me a little bit of time to wrap my head around, but once you get it, you get it.<\/p>\n

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You can open an ISA, and the interest on it will be tax-free, i.e. you don\u2019t pay any tax and get to keep that money. Within the world of ISAs, there are main types of ISA you could put your money in, which include:<\/p>\n

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