As we approach the new tax year, many people are being urged to take advantage of certain perks that will only be available over the next few weeks.
Money-saving expert Martin Lewis highlighted one of such perks - Individual Saving Allowances (ISA). An ISA is a unique form of saving money in which the money you put into it each tax year becomes protected from taxes indefinitely.
Speaking on his Martin Lewis podcast, the consumer champion highlighted that people only have a set allowance each tax year for their ISA, which automatically resets once the tax year ends.
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Mr Lewis said: "I tend to think the 31st of December, New Year's Eve as we call it, is just a meaningless sentimental date. But actually, the real year-end that matters is the fifth of April, as the end of the tax year has a material impact on your life and pockets, which is why I am supporting that tax year calendar that they're launching for Comic Relief.
"Now we're going to focus on just one element of the end of tax year today which is ISAs. Each tax year, you get an allowance where you can put money away to protect it from tax or get perks including, in a lifetime ISA, 25 per cent bonus towards a first home.
"And if you don't use it, if you don't use the year's allowance, you lose it on the fifth of April. But if you put money into a cash ISA, now the maximum amount you can put into a cash ISA or stocks and shares ISA or any ISA in total in a year is £20,000. If you put money into an ISA in a tax year, it's not just tax free that year, it's tax free year after year after year until you take it out."
Providing an example, Mr Lewis stressed the benefits of an ISA by demonstrating that you could quickly save a fortune by taking full advantage of ISAs.
He added: "So picture it, if you were lucky enough to put £20,000 in now into a cash ISA, you could then put another £20,000 in on the sixth of April - the start of the new tax year - and then another £20,000 in a year on the sixth of April, then that's £60,000 protected from tax.
"This is why there are some people out there with hundreds of thousands of pounds in ISAs and in fact, I heard there are a few with over £1 million in ISAs because they maxed their allowance out, they often have investment ISA where it's grown really quickly."
Mr Lewis highlighted that an ISA is "not for everybody" and that it depends on your financial circumstances. But he adds that if you can get an ISA then you should do it as soon as possible because it takes time to process, summarising that you either "use it or lose it".
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