We’ve written about Individual Savings Accounts in the past, and they really are a great way to save. However, they aren’t without their problems. More and more attention is being put on this form of saving, and we just wanted you to be aware of any pitfalls that you might run into.

One of the top things about an ISA that you need to realize is that you can’t convert everything to it. Many people started making Child Trust Funds for their children, only to find that the program has been phased out. You cannot just convert over to an ISA, so a lot of people are just leaving the money in the plan. That’s something that you really need to be cautious of. The rates for the CTF’s aren’t very good either, which means that you would make more money with the ISA. That’s something that you have to think about, and it’s not something that’s always easy to deal with.

Be sure that you’re looking at this issue from every direction. Be sure that you have things going forward, not backward.

Another pitfall that you have to consider is that you cannot put all of the current savings you want into the cash portion of the ISA. You must put the rest into shares or bonds. This hurts older savers that are trying to save for retirement. If you want to get the most value out of your allowance, you have to use both sides. Otherwise, you’re stuck with less than what you deserve. Who wants to deal with that?

Let’s not forget that the lawmakers are always looking at the ISA issue. For example, there was a recent article that noted the rise of ISA millionaires, as if this is a bad thing. So be prepared for them to make more changes in the future. This doesn’t mean that you shouldn’t be saving money where you can, but it does mean that you’re just going to have to watch the news. At this time, the Government isn’t making any clear cut moves but that doesn’t mean that they aren’t making them. Make sure that you just keep yourself aware of what’s going on.

Good luck with all of your upcoming financial decisions!