Nisa and easy

It is a question I found waiting for me on my doormat last week, after I returned home a little tired from a lovely hour wandering around the Matisse exhibition at Tate Modern (thank you M&G, well worth a visit)

The message only caught my eye because it was emblazoned across the front of a mailing from Hargreaves Lansdown — and like most taxpayers I really would like to pay less tax (and National Insurance for that matter).

Also, next to the bold statement on the front of the envelope was a striking picture of a beaming Peter Hargreaves CBE, the ebullient multi-­billionaire co-founder of this excellent company, which started in a Bristol bedroom 33 years ago and is now a constituent of the FTSE100 index capitalised at around £5.93bn, give or take a pound.

It is not often someone in the financial services industry — other than the odd ‘celebrity’ such as Carol Vorderman or Michael Parkinson — is brave enough to appear on the front of a mailshot (and in colour as well).

Can you imagine your reaction if you received a similar mailing from a smiling npower chief executive Paul Massara imploring you to switch energy supplier? Your blood would probably boil over with anger.

So rather than chuck Hargreaves Lansdown’s mailing in the kitchen bin (normal depository for most of my mail), I opened it to read how indeed I could pay less tax. I was greeted with yet another picture of Mr Hargreaves (still smiling which was nice) and the bold headline: ‘ISAs: new, improved and as easy as 1-2-3’.

I could pay less tax, he explained, because I could now shelter more of my capital (if only I had capital) from tax.

Like many providers of fund platforms, Mr Hargreaves’ excited mailshot mood has been triggered by the dawn of the New Individual Savings Account (Nisa). Provided we have the ‘capital’ we can now invest £15,000 a tax year in a Nisa, a vast improvement on what went before when the annual contribution limit was set at £11,880.

And if you are wondering, there are three versions of the ‘easy as 1-2-3’ that Mr Hargreaves gives in his personal mailing.

Version One (sound): Nisas make it easy to invest, are easy to manage and provide easy access.

Version Two (pure marketing): you can get hold of a Hargreaves Lansdown Nisa by visiting its website, completing the enclosed application form or giving the company a ring.

Version Three (a mix of versions one and two): Nisas are easy, you can invest as little as £50 a month (from little acorns grow great oaks) and, by the way, we have chosen two investment funds to make your Nisa life easy (Axa Framlington Managed Balanced and Hargreaves Lansdown Multi-Manager Income & Growth).

I take my hat off to Mr Hargreaves for seizing the Nisa moment so spectacularly (no wonder he is so successful), although he has not been alone in welcoming this remoulding of the Isa.

Fidelity launched a decent guide to coincide with the launch of Nisa with the strapline: ‘From Isa to Nisa — what’s changing and why it’s good news for investors’. Good for them for hitting the Nisa road running. Others have been similarly fulsome in praise of Nisa.

Cynic as I am, I can not quite get as excited about Nisa as either Mr Hargreaves or masters of the investment universe Fidelity. But then again, I do not think you can work in financial services and not believe that Nisa is better than Isa; that in turn was better than Pep and Tessa combined.

On the ‘negative’ side, the £15,000 annual contribution limit is generous in the extreme; who other than overpaid Premiership footballers, pop stars and bankers have a spare £15,000 a year to commit to Nisa?

As Jason Hollands, managing director of Bestinvest, has already pointed out, only 8 per cent of Isa contributions in the tax year ending April 2012 were for the maximum £10,680. Given this statistic, it can be argued that the £11,880 limit prior to the beginning of this month was already sufficient without it being ratcheted up to £15,000.

On the plus side, the greater flexibility of the new Nisa regime is welcome; namely, the ability of savers to switch stocks and shares into cash, and for cautious savers to use their entire annual allowance to put money on deposit tax free.

It remains to be seen, however, whether many providers will be able to deal with the expected deluge of switches that the new Nisa regime will trigger. My colleagues on the Daily Mail have already said that some transfers from shares-based Isas into cash-based Isas could take at least five weeks.

For you good independent financial advisers out there, I think Nisa provides great opportunities. It will enable you to migrate more of your clients’ taxable holdings in investment funds, investment trusts and shares into a tax-efficient environment. It will also give you a good excuse maybe to re-engage with clients you have not seen for a while.

After all, as Mr Hargreaves has already shown, Nisa is quite an easy savings message to get across: ‘Do you want to pay less tax?’ Who would not?

Jeff Prestridge is personal finance editor of the Mail on Sunday