Financial Tips Investing in ISAs

							31/03                                                                               12 March 2003

DON’T LET YOUR SAVINGS BE TAXING

With less than a month before the end of the tax year, why not take some time to give yourself a
financial makeover? By assessing your savings situation you can ensure that you take advantage of
any possible tax savings you could make.


With an Individual Savings Account (ISA), the money you invest grows free of all income and
capital gains tax. However, there are limits on the amount you can invest each year. So, before
jumping headlong into your investment make sure you choose the right type of ISA to suit your
needs.


Diann Hartnell, Head of Savings for Lloyds TSB, says: “It’s important to remember that the Inland
Revenue imposes strict limits on the total amount you can pay into an ISA annually – regardless of
the amount you withdraw. Remember that once you take money out you can’t put it back in. So if
you’re as likely to make regular withdrawals as you are payments keep some money in an instant
access account to better suit your needs.”


If you are thinking about investing in an ISA, here are some pointers:
   Be sure you open the right type of ISA. You can save up to £7,000 in any one-tax year in up to
    three mini ISAs, where only £3,000 can be invested in the stock market, £3,000 in cash and up
    to £1,000 in assurance.
   If you are likely to invest more than £3,000 in stocks and shares in any one-tax year, you should
    open a Maxi ISA – where the full £7,000 can be invested in the stock market. You can only
    open one type of ISA – Mini or Maxi – per tax year. Opening a Mini ISA and a Maxi ISA is
    not permitted in the same tax year.
   Another type is a TESSA ISA, where you can invest the original capital of a matured TESSA
    (up to £9,000) providing it has matured within the last six months. Best of all, this doesn’t
    affect the amount of money you are allowed to put into a maxi or mini ISA.
   Make sure you check to find out the best rates available. Most providers do not levy exit
    penalties so switching is a relatively straightforward process. Savers will not lose their tax-free
    allowance by moving the cash to a provider paying a better rate of interest.
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Diann Hartnell, adds: “The TESSA ISA is one of our most popular savings accounts, appearing
regularly in best buy tables with an interest rate of 4.25 per cent on £9,000. With the benefit of
tiered interest rates you can start with a minimum of £10, and the more you put in the more interest
you’ll gain.”

If you are interested in transferring your existing TESSA ISA to another provider you will need to:
   -   Obtain an application form from the provider you wish to switch to.
   -   Send the completed application form to your existing provider.
   -   You will need to provide two original forms of ID that give your name and address, e.g. a
       recent bank statement or household bill
   -   Instruct your existing provider to transfer your account to the new provider. They should
       then raise a transfer certificate and send this together with a cheque, the completed
       application forms, and the ID to the new provider.

If your TESSA has already matured, you will need to:
   -   provide the original TESSA maturity certificate – if the funds are still within the 6 month
       reinvestment period following maturity
   - send the capital (the money originally paid in but not the interest) from the TESSA by
       cheque
   -   send a completed TESSA ISA application form
   -   supply two original forms of ID examples as above

If you need any help on how to transfer your TESSA or your Mini Cash/TESSA ISA or open a Mini
Cash/TESSA ISA ask at your local Lloyds TSB Branch. Also, check to see if your existing
provider can help.

Don’t wait too long to give your savings a new look – to help get the maximum advantages from
your tax allowances you’ll need to act by April 5, the end of the current tax year.

                                               - ends -

Notes to Editors:
Lloyds TSB ISAs are CAT (Charges, Access & Terms) Standard

For further information:
Shelley Lopez / Emma Slater
Lloyds TSB Press Office
Tel: 020 7356 2444 / 2098