ISA - Individual Savings Account

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ISAs are a tax-free way to save or invest money in the UK. Any growth and income you make inside an ISA isn’t subject to income tax or capital gains tax.

There are different types of ISA’s: 

• Cash - savings held in cash, like a savings account.

• Stocks and Shares - invest in shares, funds, bonds, etc.

• Innovative Finance - peer-to-peer lending and similar.

• Lifetime (LISA) - for first-time homebuyers or retirement.

• Junior (JISA) - for under-18s.

(You may have a Help To Buy ISA but they are longer available to open). 

Right now, you can save or invest up to £20,000 across the different types of ISA’s (and, separately, up to £9,000 per child in a JISA). If up to £4,000 of that is put into a LISA, the government will top up with a 25% bonus, but that money must be used towards a house or after the age of 60 in order to avoid penalties.

From 2027, the £20,000 allowance will remain but the cash element will be limited to £12,000 for people under 65 to encourage people to invest rather than save.  

You can open ISA’s through banks, building societies and investment platforms.

Love Eleanor. xxx