We all know that saving for our futures is important. Yet according to a recent study carried out by Skipton Building Society, around a quarter of UK adults have no savings. Plus, many of those that do have some money put away do not have enough saved up to remain financially secure over the long-term. If you fall into either of those categories, it is wise to open some form of savings account, in 2020. Below, I tell you a little about the different types of ISA that are available.
Using this information, you should be able to quickly identify which one is likely to be best for you. But, because I am not a trained financial advisor, you will still need to do some further research, before opening one. Hopefully, by sharing with you what I know I will save you a little time and help to motivate you to start saving for your financial future.
ISAs that lock your cash away out of reach
If you are the type of person who struggles not to dip into their savings, it is probably wise to open a fixed rate ISA. These accounts typically provide you with a slightly higher rate of interest in return for your agreeing not to withdraw the cash for a certain period of time.
However, that does not mean that you cannot get hold of any of your cash before then. In an emergency, you can usually still withdraw it. But, normally, you will have to give some notice to be able to do so. Before putting any money into an account like this, read the small print and double-check that you can withdraw cash fast enough, should you need to do so.
Lock cash away in a junior ISA
If you have children, opening junior ISAs for them is still a good idea for most families. With these accounts, it is virtually impossible to get any of the money out before your child turns 18. So, it truly is locked away from temptation. But, you need to understand that the money you put into them belongs to your child, not you. No matter what, when your child turns 18 they get full control of their Junior ISA.
Easy access cash ISAs
If you would rather have the ability to withdraw your cash whenever you want an ordinary cash ISA is likely to be the best solution. You can save as little as you want. But, there is an upper limit to how much you can put into ISAs, each financial year. Most years the government increases that limit so how much you save can keep pace with the rising cost of things.
Where to find more in-depth advice
If you want to learn even more about ISAs before opening one or speaking to a financial advisor, you can do so by clicking here. The article you will be taken to covers the more complex options including stocks and shares ISAs and lifetime ISAs.