An ISA, or Individual Savings Account, is a tax-efficient savings account available
to UK residents.
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Types of ISAs: There are four types of ISAs available in the UK:
Cash ISAs,
Stocks and Shares ISAs,
Innovative Finance ISAs,
and
Lifetime ISAs.
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ISA Allowance: Each tax year, UK residents over the age of 18 can save up to
a certain amount in an ISA tax-free. This is known as the ISA allowance and
for the tax year 2023/24 it is £20,000.
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Tax-free savings: Any interest, dividends, or capital gains earned on an ISA
are tax-free, making them an attractive option for savers.
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Transferring ISAs: It's possible to transfer ISAs from one provider to another,
and from one type of ISA to another, without losing the tax-free status of the
savings.
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Restrictions: There are some restrictions on ISAs, including a limit on the
amount that can be saved each year, and restrictions on the amount that can
be withdrawn from a Lifetime ISA without penalty.
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Use of ISAs: ISAs can be used for a variety of savings goals, from building
an emergency fund to saving for a deposit on a house, to planning for
retirement.
Overall, ISAs offer a tax-efficient way to save for a range of goals, and
can be a useful addition to any savings strategy. To explore the options open to
you, talk to one of our advisers now.