All about ISAs

Our 1 minute ISA explainer will give you all the basics you need to know about ISAs. 

Individual Savings Accounts (ISAs) are a type of tax-efficient savings account available to UK residents. There are four types of ISA accounts: 

• Cash ISAs
• Stocks and Shares ISAs
• Innovative Finance ISAs
• Lifetime ISAs (LISAs)

Each account type has a different purpose, benefits and limitations. 

The biggest advantage of an ISA is that your money can grow and you won’t pay any tax on it.  

The Government sets a limit for each account type every tax year. You can save the full amount into one type of account or split the allowance across account types. A tax year in the UK runs from 6 April to 5 April the following year. 

The maximum annual allowance for ISAs is £20,000 per tax year. This is how much money you can pay in each year, not the total value of the ISA. This is the limit across ALL of your different types of ISA accounts. So you could put £5,000 in a Cash ISA and £15,000 in a Stocks and Shares ISA. The maximum amount you can put in a Lifetime ISA is £4,000 per tax year. 

The allowance expires at the end of each tax year, so if you have any unused allowance, this is lost rather than rolled over.