What is an ISA?
ISA stands for Individual Savings Account. ISAs are a tax-efficient way of saving money. You can save or invest up to a set amount (your ISA allowance) each tax year and you don't pay any tax on the income or capital gains (for an investment ISA, like ours) or on the interest paid (for a cash ISA).
How do ISAs work?
- Each tax year you will have a new ISA allowance. This is the amount that you can pay into your ISA(s) in that tax year. The current ISA allowance is £20,000. Each tax year you are able to save your money into one of each kind of ISA. Subject to not exceeding the overall £20,000 allowance.
- You can either split your allowance across different types of ISA (for example £10,000 in a stocks and shares ISA and £10,000 in a cash ISA), or choose to invest all of your ISA allowance into one type.
- Any money your ISA makes from either gains in the stock market, or from income, is tax-free.
You cannot carry over your ISA allowance. If you don't use your whole allowance in a tax year, it will be lost. The UK tax year runs from 6th April to the 5th April the following year.
When choosing the best ISA for your money, it's important to consider which type of ISA best suits your financial goals and risk limits.
To help you get started, read our ISA comparison below. It offers a snapshot of the four different types of ISA, including their typical investment portfolios, eligibility requirements and ISA allowances.
We also recommend you talk with a financial advisor or get in touch with our team to learn more about ISAs before investing.
|Stocks and Shares ISA||Cash ISA||Innovative Finance ISAs||Lifetime ISAs|
|Description||A Stock and Shares ISA is a tax-efficient investment account
that allows you to invest in a diverse range of funds, shares, investment trusts and bonds. It's designed as a medium to long term investment option for at least 5 years. Learn more about our Stocks and Shares ISA.
|A Cash ISA is very similar to an everyday savings account except any interest it pays will be tax free.||An innovative finance ISA contains peer-to-peer loans instead of stocks and shares or cash. Peer-to-peer lending matches investors with borrowers.||A Lifetime ISA (LISA) is designed to help people save for their first home or for their retirement. The government will give you a 25% bonus of what you pay in each tax year.|
|How your money is invested||
|ISA Allowance||You can save up to £20,000 per tax year in a Stocks and Shares ISA account or split the allowance across some or all of the other types of ISA.||You can save up to £20,000 per tax year in a Cash ISA account or split the allowance across some or all of the other types of ISA.||You can save up to £20,000 per tax year in a Innovative ISA account or split the allowance across some or all of the other types of ISA.||You can only pay £4,000 into your Lifetime ISA in a tax year.|
We currently only offer a Stocks and Shares ISA.