Article Abstract:
Saving may be necessary to purchase a home, or pay for a major expenditure, but United Kingdom savers get low returns after inflation and tax are taken into account. This means that they should select savings accounts with care. Individual savings accounts (Isas) have been introduced to promote saving through tax benefits, and a limit of 3,000 pounds sterling for cash savings in building societies and banks drops to 1,000 pounds in 2000. The stock market may offer far higher returns than deposit accounts, so should be considered by investors with large amounts of cash.
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Article Abstract:
UK tax-exempt special savings accounts (Tessas) were introduced in 1991 and have brought in some 30 billion pounds sterling, according to tax authority estimates. Some 15 billion pounds is to be to be paid out in 1st qtr 1996, and 20 billion pounds in full-year 1996. Tessas provide a tax-free income if savings are left for five years, and they are of especial benefit to people who are liable for high rates of tax. Taxation on savings will be reduced for those on the basic rate but not for higher rate payers.
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Article Abstract:
United Kingdom tax-exempt special savings accounts (Tessas) are to be replaced by Individual Savings Accounts (Isas). Escalator Tessa pay increasing amounts of interest at set rates, and there are also equity-linked Tessas with returns linked to changes in the FTSE 100 stock prie index. Investors should assess the likely direction of interest rates before committing themselves. Investors withdrawing from equity-linked Tessas prior to the end of a five-year investment period have to pay stiff penalties.
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