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Financial milestones
for 2017

No matter what your financial priorities are for 2017, it always pays to have an idea what’s coming up. Here, we present a few things you should be aware of for the coming year.

Key financial changes for 2017

As well as the new 12-sided £1 coin being introduced later this year, 2017 sees the introduction of a higher ISA limit. From April, you will be able to save up to £20,000 tax free in ISAs, up from £15,240 at present. 

Don’t forget that you can split your allocation between Cash, Stocks & Shares, and Innovative Finance ISAs. If you choose to save in the new Lifetime ISA, this will also form part of your ISA allowance. For example, you could save £15,000 of your ISA allowance in a Cash ISA and invest the remaining £5,000 of your limit in a Stocks & Shares ISA.

Rules around flexible ISAs also mean that some accounts allow you to pay in and withdraw throughout the year without affecting your limit – your allowance is effectively your ISA balance at the end of the year, not the running total of payments/withdrawals, as used to be the case. Check with your ISA provider if your ISA is flexible.

The Lifetime ISA

The new Lifetime ISA is planned to launch in April, open to savers aged between 18 and 39.

You can save up to £4,000 a year into a Lifetime ISA, which counts towards your overall ISA allowance. You receive a government bonus worth 25% of your contribution, up to £1,000 a year, paid until your 50th birthday. 

Some or all of the balance can be used to buy your first home, or can be accessed tax-free from age 60 to help fund your retirement. But be aware that if you want to get hold of your money for any other reason, there will be a 25% charge applied by the government to the amount you withdraw, which effectively returns the government bonus with a small additional charge applied. The only exception is in the event of terminal illness. Before investing in a Lifetime ISA, you should be sure you’re comfortable with locking up your money for such a long time.

You can save up to £4,000 a year into a Lifetime ISA

Depending on your personal circumstances it may be better for you to save into a workplace or private pension, you can save up to £40,000 a year, including any contributions paid by your employer. If you’re looking to boost your savings, did you know you may be able to use up to three years’ worth of unused annual allowance on your pension contributions? This may be particularly relevant if you’ve had a windfall, such as a large bonus or inheritance.

The economic outlook for 2017

The watchword for the global economy in 2017 will be ‘uncertainty’. With questions over Brexit, the policies President Trump will pursue, and Europe’s political direction, it’s far from clear what 2017 will bring.

There are big questions over the terms – and even timing – of the UK’s exit from the European Union and its impact on the economy. According to the Bank of England, the impact of Brexit looks set to reduce the UK’s economic growth from an estimated 2.2% to 1.4 %, with inflation expected to peak at around 2.75 % by 2018. 

However, the Bank of England also notes that the Base Rate – currently at an historic and unprecedented low rate of 0.25% – is unlikely to rise in the near future, absent a sharp rise in inflation. This will cause further pain for savers, already facing low savings account interest rates. 

Skipton is here to help

With so much instability and uncertainty in markets and the global economy, it’s very important therefore for investors to seek expert financial advice.

Our financial advisers can make recommendations tailored specifically to your circumstances. They will take into account the level of risk that you’re willing to take with your investments, the kind of returns you want to generate, and other financial obligations you may have.

From here, a financial adviser will be able to design a financial plan, drawing on a carefully selected range of investment funds, from well respected providers.

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According to feedback from 6,721 financial advice customers between July 2009 and December 2015, 93% of our customers would recommend our financial advice services to their family and friends.

Why choose Skipton Financial Advisers
Skipton Financial Advisers

Stock market-based investments are not like building society savings accounts as your capital is at risk and you may get back less than you invested. The value of your investments and any income from them may fall as well as rise.

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