Individual Savings Account

What is an Individual Savings Account (ISA)?

Anyone, who is an income tax payer and has some money to save or invest, should know about Individual Savings Accounts (ISAs). ISAs are wrappers within which a wide range of savings and investment products can be held, free of UK income and Capital Gains Tax (CGT) by anyone aged 18 or over (16 or over for cash ISAs).

ISAs allow individuals to invest up to maximum limits (by way of regular or single amounts) each tax year in a range of savings and investments and pay no personal tax at all, on the income and/or profits received.

The main ISA benefits are:

• No personal tax (income or capital gains) on any investments held within an ISA.
• Income and gains from ISAs do not need to be included in tax returns.
• Money can be withdrawn from an ISA at any time without losing the tax breaks.

The main types of ISA's avaialbe are:

• Stocks & Shares ISA's are in the form of either individual shares or bonds, or pooled investments such as open-ended investment funds, investment trusts or life assurance investments.
• Cash ISA's are usually contained in a bank or building society savings account.
• Innovative Finance ISA's are in the form of loans made through peer-to-peer (P2P) platforms.
• Lifetime (LISA) are for those aged between 18 and 40 to help save them up for their first home or retirement.
• Help to Buy ISA's although closed to new to accounts since 30th November 2019, are aimed at helping first time buyers to save for their mortgage deposit. Savings can continue into existing plans until November 2029. It is not possible to subscribe to both a cash and a Help to Buy ISA in the same tax year.

Find out more in our Individual Savings Account (ISA) Guide

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