The number of people in their 20s and early 30s choosing to invest in a Stocks & Shares Individual Savings Account (ISA) prior to the coronavirus pandemic outbreak increased according to the latest HM Revenue & Customs annual ISA data[1].<\/p>\n
Research shows that Generation Z and Millennials are now more likely to invest than Baby Boomers. Many have given up on cash altogether, disillusioned by today\u2019s dismal savings rates. An ISA is a tax-efficient investment vehicle in which you can hold a range of investments, including equities.<\/p>\n
Different types of investment options<\/b><\/p>\n
The different types of investment that can be held in a Stocks & Shares ISA include: unit trusts, investment trusts, exchange-traded funds, individual stocks and shares, corporate and government bonds, and OEICs (Open-Ended Investment Companies).<\/p>\n
The data shows that under-25s are now the fastest-growing demographic in terms of Stocks & Shares ISA subscriptions, followed by those aged between 25 and 34. Subscriptions across both age brackets jumped 92.3% from 131,000 to 252,000 between the 2016\/17 and 2017\/18 tax years.<\/p>\n
\u201cUnder-25s are now the fastest growing demographic in terms of Stocks & Shares ISA subscriptions, followed by those aged between 25 and 34\u201d<\/p>\n
More subscribe to a Stocks & Shares ISA<\/b><\/p>\n
The number of under-25s with both a Stocks & Shares ISA and a Cash ISA also increased by 138% from 13,000 to 31,000 over the same period. The number of people aged between 25 and 34 subscribing to a Stocks & Shares ISA leapt 71% from 109,000 to 186,000 between the 2016\/17 and 2017\/18 tax years.<\/p>\n
By comparison, analysis found that the number of people aged between 35 and 44, as well as those aged 65 and over, who subscribed to a Stocks & Shares ISA increased by just 4% and 5% respectively over the same period.<\/p>\n
Less of an appetite for investment risk<\/b><\/p>\n
The analysis also indicated that the figures for people aged between 45 and 54, as well as those aged between 55 and 64, subscribing to a Stocks & Shares ISA actually fell over the course of the year, indicating that these age groups had less of an appetite for investment risk.<\/span><\/p>\n The introduction of the Lifetime ISA, which gives subscribers a 25% government top-up on their savings (up to a maximum of \u00a31,000 a year), is at least partly responsible for the uplift in the number of under-35s trying their hand at investing. Those aged between 18 to 39 can open a Lifetime ISA and save up to \u00a34,000 annually, tax-efficiently, up to including the day before their 50th birthday.<\/p>\n \u201cSavings held inside the ISA\u2019s tax-efficient wrapper are exempt from Gapital Gains Tax, dividend tax and Income Tax\u201d<\/p>\n You can\u2019t carry any unused amount over<\/b><\/p>\n Since ISAs were launched 21 years ago, savers have accrued billions of pounds in these tax-efficient wrappers. The 2020\/21 Stocks & Shares ISA allowance is \u00a320,000 for individuals aged 18 and over. All savings held inside the ISA\u2019s tax-efficient wrapper are exempt from Capital Gains Tax, dividend tax and Income Tax.<\/p>\n Bear in mind that the amount you can contribute into an ISA is limited by the type of ISA you have. The tax year runs from 6 April one year to 5 April the next, and you can\u2019t carry any unused amount over to a new tax year \u2013 so it\u2019s either use it or lose it. The ISA allowance simply resets back to the annual allowance again on 6 April.<\/p>\n Making the most of the 2020\/21 \u00a320,000 ISA allowance?<\/b><\/p>\n Depending on your financial goals and plans for the future, if you are looking to put your money away for the medium to long term (five years or more), then a Stocks and Shares ISA is a tax-efficient way to invest. To find out more about your investment options, please contact us.<\/p>\n Source data:<\/b><\/p>\n [1] https:\/\/www.gov.uk\/government\/statistics\/individual-savings-account-statistics<\/p>\n INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.<\/b><\/p>\n THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.<\/b><\/p>\n PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE.<\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Giving up on cash altogether, disillusioned by today\u2019s dismal savings rates The number of people in their 20s and early 30s choosing to invest in a Stocks & Shares Individual Savings Account (ISA) prior to the coronavirus pandemic outbreak increased according to the latest HM Revenue & Customs annual ISA data[1].<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/posts\/336"}],"collection":[{"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/comments?post=336"}],"version-history":[{"count":1,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/posts\/336\/revisions"}],"predecessor-version":[{"id":337,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/posts\/336\/revisions\/337"}],"wp:attachment":[{"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/media?parent=336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/categories?post=336"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.a1-financial.com\/blog\/wp-json\/wp\/v2\/tags?post=336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}