Whatever you think of our new government’s Budget, there’s probably one thing all of us savers and investors can agree on: thank goodness they didn’t touch the Stocks and Shares ISA!
ISAs were relegated to a one-sentence ditty on page 128 confirming that “annual subscription limits” would remain at £20,000 until at least 5 April 2030.
One particularly pleasing detail was that ISAs didn’t even seem to be part of the conversation. While newspaper readers were subject to a succession of (probably perception-testing) leaks and rumours, not once was any kind of change to ISAs even mooted.
Does that mean ISAs are safe in the long term? It’s hard to say but it’s a good sign that governments don’t appear to think the fallout from touching these accounts is worth it.
Comfortable
A quick calculation can show just how profitable an ISA can be. Five years of maxing the ISA, then another 20 of letting the cash grow at 10% returns gives an account of £903,583. A nine times return on initial stake seems worth looking into, if you ask me.
And even with inflation to take into account, that kind of cash could set things up very comfortably in later life and throw up early retirement as a possibility too.
And shrewd investments in the right companies or sectors can push those returns up even higher.
Take artificial intelligence. The rise of AI will lead to some serious growth if even a tenth of some of the bold claims that have been bandied about come to fruition.
So far, the rise of AI has mostly benefitted companies designing the chips or those designing the architecture itself, but at some point the efficiencies will likely filter through to existing companies.
AI future
Relx (LSE: REL) is one FTSE 100 company that is eyeing up an AI-fuelled future. The firm deals with vast quantities of data often in hard-to-decipher fields like law and medicine.
This one of AI’s prime use cases and you can already fire up ChatGPT and ask it to deliver a fairly comprehensive summary of any data you feed it.
Relx has released products in this area already and has overseen revenue growth from £7.24bn to £9.16bn in the last two years. Could that just be the start? I wouldn’t bet against it and may open a position soon.
I’ll note that the technology isn’t fully there yet. User reports show that issues with “AI hallucinations” exist that will limit the usefulness of such products especially in fields that really can’t afford errors.
In any case, with a reminder that the Stocks and Shares ISA has at least another six years left with us, now is as good a time as any to be looking for this or any other high-growth stock.
