Don't get stung by nasty ISA fees

There's a nasty nip for investors who commit their hard earned ISA cash to certain investment trusts. Investment trusts traditionally have a reputation for low charges compared to their near half-sibling, unit trusts.

However a new investigation has discovered that some trusts, including several well-respected operators, are quietly amping up charges.%VIRTUAL-SkimlinksPromo%

Investments with bite

Are investment trusts still worth a look? Broadly, yes, but it does depend on what you buy into. For example, a new Telegraph investigation found several high-profile funds were imposing extra admin fees - Witan Trust's £30 fee is an example - on top of existing annual management fees.

Once an investment trust manager charges a fee for an 'ISA wrapper' – of up to 1% – then the total costs, compared with unit trusts, don't look so competitive the Telegraph claims. Bear in mind that many unit trust fund annual fees, in comparison, can still exceed 1.5%. The fee gap though is narrowing.

Part of the reason why new investment trust charges are being introduced is because of increased outsourcing to much bigger third parties, limiting the chance to buy direct from a fund manager. Also, the Retail Distribution Review - it came into force at the start of the year - saw the end of many commission-related investments, putting more emphasis on fee-based investments instead.

Commission pressure

Some investment trusts have resisted the extra charge trend - so far. These names include Martin Currie, Barings and Fidelity. (Indeed, a fund like Martin Currie's Securities Trust of Scotland charges just 0.3% a year and has soared more than +65% in the last three years.)

However investment trusts remain, for the majority of retail investors, a minority preference, not helped by financial advisers historically teering their clients towards unit trusts thanks to fatter fees. So some trusts are unlikely to face too much pressure from retail investors to keep fees at previous low levels.

Last year Winterflood Securities compared charges between investment trust and unit trust funds and found that investment trusts remained cheaper 62% of the time while unit trusts tended to be cheaper 23% of the time.

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Don't get stung by nasty ISA fees

If you wear a uniform of any kind to work and have to wash, repair or replace it yourself, you may be able to reclaim tax paid over the last four years. For some people, this could mean a windfall worth hundreds of pounds

The interest you receive on savings accounts (with the exception of cash Isas) is automatically taxed at a rate of 20%.

Higher-rate taxpayers therefore tend to owe money on the interest they are paid throughout the year. If, however, you are on a low income or not earning at all, you should be able to claim all or some of the tax deducted back

You can apply for a refund of vehicle tax if you are the current registered keeper or were the last registered keeper of your vehicle that no longer needs a tax disc

If you pay tax on a company, personal or State Pension through PAYE (the system employers use to deduct tax from your wages), you may well end up overpaying

There is a limit to the amount you need to pay in NI, whether or not you work for an employer.

Instances in which you may find that you have overpaid include if you work two or more jobs and earn more than £817 a week and if you move from self-employment to employment, but continue to pay Class 2 National Insurance contributions

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