Guide to Individual Savings Accounts (ISAs)

New ISA rules good news for investors
Use it or lose it - your ISA allowance is lost forever if it isn't used by the end of the tax year.

Individual Savings Accounts (ISAs) offer savers tax free interest on their savings. This site offers an overview of the rules, which are often misunderstood and frequently change.

With interest rates at their lowest in a generation, and an increase in taxes highly likely, it is imperative to make the most of any tax-free investments on offer. ISAs have been extremely popular since their introduction, and in the current economic climate ISAs are more important than ever. Every UK resident aged over 16 has an ISA allowance, so it is important to plan for the future as early as possible.

Current rules stipulate that savers can invest a total of £10,200 annually into ISAs. Of this amount £5,100 can be saved into a cash ISA, with the remainder (an additional £5,100going into a stocks and shares ISA (otherwise known as an Equity ISA). Savers are permitted to invest the entire amount (£10,200) into a stocks and shares ISA.

Savers are only permitted one cash ISA per year, and one stocks & shares ISA. If the annual allowance is not used within the tax year, then it is lost forever. There is no maximum investment limit, so substantial amounts can be saved by using the yearly ISA allowance. If you withdraw from your ISA, then that part of the allowance is lost. It is possible (and often advisable) to transfer an ISA. It is important to follow the ISA tranfer rules or your savings can lose their ISA status.

ISAs are not complicated, but the rules can seem confusing to new savers. Have a read of the information on this site, and if you still have a question about ISAs then you can submit it to us at our ISA questions page.