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ISA Factsheet

We've pulled together everything you need to know about both Cash and Investment ISAs in our handy ISA fact sheet - so you can start saving tax-free straight away!

What is an ISA?

ISAs (Individual Savings Accounts) are savings & investment accounts that protect your money from the taxman. You can save or invest up to £11,520 in ISAs this tax year without paying tax on any interest you earn, any profit you make or on any dividends you receive.

The £11,520 maximum relates to the amount of money you can pay into ISAs each tax year, not the account balance. Once you’ve used your full allowance you won’t be able to add any more until the following year, even if you make a withdrawal.

The ISA year runs from 6th April one year to 5th April the next (the tax year); you get a new allowance each tax year. If you don't use your annual ISA allowance by 5th April (the end of the tax year) you lose it as it's not possible to carry any unused allowance over from one year to the next.

There are 2 different types of ISA; Cash ISAs and Investment ISAs.

Cash ISAs

How do they work?

Cash ISAs work just like ordinary savings accounts.

Save up to £5,760 this tax year
Earn interest on your money
Protect your money from income tax
Available as instant access or fixed term accounts
Save a lump sum or make regular investments
No risk to your money
Can transfer your money to an Investment ISA at a later date
No fees or charges
Available to UK residents age 16+
Previously known as Mini ISAs

Investment ISAs

How do they work?

Investment ISAs act as wrappers that protect your investments

Invest up to £11,520 this tax year less any amount you've saved in a cash ISA that same year
Protect your money from capital gains tax and income tax on dividends
Flexible investment options - invest in your choice of shares, gilts, bonds, funds & more
Manage your investments yourself or invest in a collective fund so an ISA manager does it for you
Your money is not guaranteed, it’s possible your investment could go down in value as well as up
Decide how risky you want your investments to be
Invest a lump sum or make regular investments
Better as a mid-long term investment
Management charges will apply
Available to UK residents age 18+
Previously known as Maxi ISAs

What else do I need to know?

You can only pay into one Cash ISA and one Investment ISA each tax year.
If you open new ISAs you can still keep your accounts from previous years as long as you don’t add to them - even if they are with different providers.
You should think carefully before you withdraw money from an ISA as you won’t be able to top-up your balance again that tax year.

How to choose a Cash ISA

Decide:

Do you need access to your savings (instant access Cash ISA), or if you can leave them untouched for a number of years (fixed rate Cash ISA) – if so, how long?
How much do you want to open the account with?
Do you want to transfer money from previous years’ Cash ISAs into your new account?

Compare:

Compare all the Cash ISAs available. You can compare and find full details about all the Cash ISAs available in our Cash ISA comparison tables
Find the Cash ISA with the best interest rate
Check it meets your requirements and that you are eligible

Apply:

Open your new Cash ISA
Remember to stop any standing orders going to your Cash ISA from the previous year

How to choose an Investment ISA

Decide:

Do you want to manage your investment yourself (Self-Select ISA) or have it managed for you (Investment ISA)?
What type of investments do you want to make (gilts, bonds, equities, unit trusts etc)?
Do you have a preference as to the market or region your money is invested in?
How much do you want to open the account with?

Compare:

Compare all the Investment ISAs available. You can compare and find full details about all those available in our Investment ISA comparison tables
Find the Investment ISA that offers access to the investments you’re interested in and applies the lowest charges
Check it meets your requirements and that you are eligible.

Apply:

Open your new Investment ISA
Set up your investments if you’ve chosen a Self-Select option

Can you transfer ISAs?

You can transfer your money between Cash ISA accounts with different providers and between Investment ISA accounts with different providers.

You can also transfer money held in a Cash ISA to an Investment ISA, but you can’t move money from an Investment ISA to a Cash ISA.

However, if you want to transfer your ISA savings to a new ISA account with a different provider you must get your current ISA provider to do it for you - this is the only way to guarantee your money’s tax-free status.

You will need to:

Check your new ISA account accepts transfers in (ideally before you apply)
Find out if you’ll incur any penalties (fixed term Cash ISAs) or charges (Investment ISAs) for moving your money from your existing ISAs and if so work out whether it’s still worth your while
Open your new ISA account
Give your existing ISA provider details of your new ISA and ask them to transfer your balance to the new account. Don’t just withdraw your money yourself or it will lose its tax free status.