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New Individual Savings Account

Pile of £1 coins

Tax Free Savings & Home Improvements

As I mentioned in a recent Blog the old ISA is now deceased and has been replaced by the NISA (New Individual Savings Account) with a huge increase in the amount of cash you can put in, up from £5,490 to £15,000 pa.

If you’re wondering why they’ve changed the name, my guess is that George Osborne wanted to take credit by saying “we gave you NISAs”, which sounds far glitzier than “we boosted the ISA limit”.

    Unfortunately many people are still somewhat in the dark as to what you can now do and what the terminology actually means, so here’s a quick guide to NISA’s:

  1. What is a NISA: Put simply it’s a savings account that you don’t pay tax on, which has an annual investment limit of £15,000
  2. What is a Cash NISA: It’s a NISA where 100% of the investment is in cash for anyone over the age of 18
  3. What is an Investment NISA: Anyone over the age of 18 can put up to £15,000 in stocks & shares
  4. What is a Mixed NISA: As the name suggests any combination of cash or investments in stocks & shares
  5. What is a Child’s NISA: Now 16 & 17 yearold’s can also put away £15,000 (probably from the Bank of Mum & Dad)
  6. How long is it tax-free for: Once in a NISA, your money or investments stay tax-free indefinitely with no penalties on withdrawals

New Green Deal Tax Incentive

The Green Deal has been around for a couple of years but now the Government has given it a revamp and is now prepared to give you up to £7,600 to help you improve your home.

The originally Deal was a great idea, just poorly executed and the Government’s attempt to get us to make our homes more efficient has been a damp squib, so it’s changing tack. A new scheme pays up to £7,600 per household straight into your bank account as a grant, though not everyone will get the full whack. Here are the basic

    The catchily-titled Green Deal Home Improvement Fund requires you to have a Green Deal assessment, which costs between £100 and £150. You then agree a plan with a provider to fit qualifying recommended measures.

  • Offer 1: Install two or more of 12 eligible measures & get up to £1,000. This includes cavity wall insulation, boiler upgrades, double-glazing, waste water heat recovery, flat roof insulation & more. You can get cash to help, up to a max of £1,000.
  • Offer 2: Up to £6,000 for solid wall insulation. About 6.6m people live in houses with solid walls (as opposed to cavity walls). Insulation funding is available for 75% of what you pay, up to £6,000 and it is calculated that this will reduce energy bills by around £450 a year for a 3 bed house. A friend of mine has just agreed such a deal and to quote him directly: : “I’m getting 55m² of solid wall worth £7,800, but I only need to shell out £1,800.It will only take 4 years savings on energy bills to pay for it completely”
  • Offer 3: Get £100 of your assessment cost refunded. This is very straightforward, make improvements under offers 1 or 2 and you qualify for this £100 – so most of the assessment cost is covered.
  • Offer 4: Get a £500 bonus if you’ve moved in the past year. If you’ve recently moved and you make improvements under offers 1 or 2, then you get an extra £500 from the fund.
  • There is a risk you’ll pay for the assessment and not qualify for any work, but you can do free online rough assessments first.
  • Most people will pay their share upfront, but if you can’t afford it you can apply for a Green Deal loan. The repayments are based on the predicted savings on your energy bills (EG, your usage may be £450 a year lower, but your bill stays the same). There is no time limit on these loans and they’re available, even if you have a poor credit rating.
  • And finally, if your household’s annual income is less than £16k, you are likely to qualify for 100% energy company funding to pay for the whole lot instead.
  • The BBC’s own expert Martin Lewis has his own website at www.moneysavingexpert.com/utilities/green-deal. This site is well worth a visit as it goes into each area of the Green Detail in incredible detail, is written in plain English and is genuinely very useful.