Instead of the same old chocolates and flowers that get exchanged every year, why not give your loved one’s tax free savings a boost this Valentine’s Day, asks independent financial service providers, Fair Investment Company (www.fairinvestment.co.uk).

“It may not be the most romantic gift in the world, but contributing into an ISA for your other half could really pay off,” says Fair Investment’s Rachel Mason, “and you could end up being able to buy something much more romantic than a box of chocolates!

“Currently, the ISA allowance is £7,200 (£3,600 of which can be invested into a cash ISA), and for over 50s*, it is £10,200 (£5,100 of which can be invested into a cash ISA). And from April 6th, the allowance goes up to £10,200 for everyone, so not only is it worth making the most of this year’s allowance, it is also worth thinking about next year’s.”

Based on this year’s limits, a couple who both invest their entire cash allowance into an instant access account like the Scottish Widows E-Cash ISA**, which currently has a rate of 2.10%.could earn £151.20 between them in a year¹; and using next year’s limits, this would be £214.20².

And for those looking for higher returns, there are structured deposit plans like Investec 5 Year FTSE 100 Income Deposit Plan**. Linked to the performance of FTSE 100 it aims to provide potential annual payments of 5.40% – if both put their full cash allowance into the plan, this could mean a joint nest egg of £388.80 a year³ on the current limits, and £550.80⁴ a year from April 6th.

For those looking to invest into a stocks and shares ISA, and willing to take some risk with their capital, the potential returns could be much higher, as Rachel explains:

 “If a couple both invested their full ISA allowance into an investment ISA like the Barclays Wealth Regular Income Bond** – a 6 year structured investment plan currently offering a 6.50% income yield – this could mean a joint income of £936 a year⁵ based on the current limits; enough for two return flights to New York for Valentine’s Day!⁶ And based on next year’s limits, the earnings could reach £1,326 a year⁷.

 “If you already have an ISA yourself but your loved one hasn’t, if they open one up you can pay into it for them, as long as the ISA limit is not breached in either your account or theirs,” says Rachel.

“You can also transfer ISAs; so if you or your partner has used all or some of the allowance already, the balance can be moved into a better paying account.”

Cash ISAs can be transferred into investment ISAs (but investment ISAs cannot be transferred into cash ISAs); and anyone who has used their cash allowance but not their investment allowance can transfer the cash ISA into an investment ISA and top it up to the full £7,200 if they wish.

However, investors should remember that once the balance of a cash ISA has been transferred into a stocks and shares ISA, it cannot be transferred back.

Investors should keep in mind that the value of their investments and the income from them can go down as well as up and that they may not get back the full amount invested.  
“The ISA deadline is fast approaching, so why not make the most of your tax free allowance and get your Valentine a nest egg this year.”

Ends

1 based on £3,600 at 2.10%, which is £75.60 multiplied by two for a couple’s joint earnings, a total of £151.20
2 based on £5,100 at 2.10%, which is £107.10 multiplied by two for a couple’s joint earnings, a total of £214.20
3 based on£3,600 at 5.40%, which is £194.40 multiplied by two for a couple’s joint earnings, a total of £388.80
4 based on £5,100 at 5.40% which is £275.40 multiplied by two for a couple’s joint earnings, a total of £550.80
5 based on£7,200 at 6.50%, which is £468 multiplied by two for a couple’s joint earnings, a total of £936
6 based on £10,200 at 6.50%, which is £663 multiplied by two for a couple’s joint earnings, a total of £1326
7 based on two return flights from London (Heathrow) on 11/02/10 to New York (JFK) returning on 16/02/10 with British Airways a total of £933
*For those born before 6th April 1960
**Rates correct as on 10/02/10. Although this product finishes before the end of the tax year, a new rollover version will be launched with a similar structure and similar returns.