ISA age rules
Every UK resident over the age of 16 has an ISA allowance. This defines the maximum tax-free amount that can be saved in a year from April to April. ISAs have no upper age limit and the tax-free savings can be withdrawn at any time. Many cash ISAs allow instant access. You must be aged 18 or above to hold a stocks and shares ISA.
Your tax free savings can be withdrawn in part, or in full, whenever you want to access them. There are no penalties or restrictions, other than any conditions of your particular account. For example, a fixed rate cash ISA account may not permit withdrawals for the duration of the fixed rate.
There is no upper limit on the amount you can save or invest. This means that people who have used their allowances since ISAs were introduced have amassed hundreds of thousands of pounds in tax free savings.
Due to their flexibility, many people utilise ISAs as long-term savings to fund their retirement. Unlike paying into a pension, ISA savings are protected from tax and can be withdrawn at any time. Additionally, you can withdraw the money as a lump sum or as a series of lump sums to suit your needs, and unlike pensions you do not have to use any of the money to buy an annuity.
The main disadvantage of ISA savings compared with pension schemes is that ISA holdings will count against you if claiming means tested benefits. Generally, pensions are not included in such calculations.
From October 6 2009, individuals aged 50 or above were able to save up to £10,200 in ISAs. The same limit has been applied to all age groups since April 2010, so there are no longer any differences according to age. Read more about ISA investment limits