An Individual Savings Account (ISA) enables you to save in a simple, tax-efficient way, while generally giving you instant access to your money.

This gives you short, medium and long-term saving options, and with the end of the current tax year not too far away. It’s important to make the most of your annual tax-free ISA allowance. UK residents aged 16 or over can save up to £20,000 a year (for the 2019/20 tax year) into a Cash ISA. Those aged 18 or over can save in a Cash or Stocks & Shares ISA, or combination of ISAs.

Tax-Efficient Wrapper

ISAs are a very tax-efficient wrapper in which you can buy, hold and sell investments. For any ISA contributions to count for the current tax year, you must save or invest by 5 April. Also, don’t forget that any unused ISA allowance can’t be rolled over into a subsequent tax year. So if you don’t use it, you’ve lost it forever.

Which ISA?

Cash ISAs – savings accounts that are tax-free, with the maximum allowable contribution set at £20,000 in the current tax year.

Junior ISAs – tax-free savings accounts in which under-18s can save or invest maximum contributions up to £4,368 in the current tax year.

Stocks & Shares ISAs – tax-efficient with the maximum allowable contribution set at £20,000.

Innovative Finance ISAs – peer to-peer lending investments that are classed as tax-efficient, with the maximum allowable contribution set at £20,000 in the current tax-year. They are considered high risk ,and it may not be possible to get your money out quickly. Some may not be protected by the Financial Services Compensation Scheme.

Lifetime ISAs – these can be either classed as savings (tax-free) or investments (tax-efficient). You must be aged between 18 to 39. The maximum allowable contribution is set at £4,000 in the current tax year.

Help to Buy: ISAs – these were set up to help those saving for their first home and were only available to new savers until 30 November 2019. Existing savers can continue saving, although they must claim their government bonus by 1st December 2030.

If you would like to talk to us regarding your ISA please contact us.

The value of investments and income from them can go down as well as up. You may get back less than the full amount invested. The tax treatment of ISAs depends on your circumstances and may change in the future.