If you have not invested in an ISA this year there is still time to use your tax free savings limit as the tax year does not end until 05/04/2011 so you still have time to be one of the 11 million people who invested in an ISA in the 2009/2010 tax year.
For the tax year 2010/2011 you are allowed to put up to 10,200 in your individual savings account and under current UK government legislation your ISA savings are free of personal income and capital gains tax. If you have not used this years ISA allowance by the end of the tax year (05/04/2011) it is lost forever as you cannot carry it forward. This year you can put up to 5,100 into aCash ISA and up to another 5,100 into a stocks and shares investment ISA. With UK interest rates only 0.5% and lots of savings accounts paying even less and inflation running at 4% most savers with non ISA savings accounts are having their savings eroded by inflation.
Northern Rockare offering 4 years fixed 4.30% (equivalent to 7.17% for a higher rate tax payer), 3 years fixed 4.00% and even someinstant access ISAsare offering 2.90%.
If you areafter for yield (interest)rather than capital growth on a stocks and shares ISA you can save on the stamp duty that share purchases normally incur by buying one of the ETFs (electronic traded funds) the ISHARES FTSE UK DIV PLUS is currently offering a dividend yield of 4.40% or the ISHARES FTSE 100 which tracks the FTSE 100 so could offer the long term possibility of both capital andyield is offering 2.65% currently. Alternatively you could choose one of thealternative bundled packages that are offered by banks and building societies.
From the 6th April 2011 you can invest again as the new tax year starts again and the ISAlimits are increasing in line with inflation so the new limit will be 10,680.If you have not already done it this meansin the next 2 months it is possible to take 20,880 of your savings out of the tax mans grasp.