ISA

ISA

An ISA (Individual Savings Account) is a tax-free annual investment allowance.

ISAs started in 1999 and they replaced TESSA and PEP allowances. Any savings, shares or life insurance that are put into an ISA and create income or gains from the investments are free from personal taxes.

There are three types of ISA:

  • Maxi - an account with one provider. It has a £7000 annual allowance (maximum of £3000 cash +  maximum of £1000 life assurance + maximum of £3000 stocks and shares).

  • Mini - one account per component, £3000 in cash, £3000 in stocks and shares, £1000 in life assurance. Components can be from different providers. Allowances cannot be altered as they can in a Maxi Isa. 

  • Tessa only - ISAs can be opened only with capital from a matured TESSA.

    ISAs are available from ISA managers, which can be:

  • Financial advisers

  • Banks

  • Building societies

  • Insurance firms

  • Stockbrokers

  • Insurance firms

  • Solicitors

    ISA managers will explain what types of ISAs their company provide. You give your money to an ISA manager, who then invests the money for you so you get the tax benefits.

    Access to your ISA money depends on which one you get. Certain types of ISA have fixed time periods (you may lose interest or bonuses without proper notice).

    With some share and life insurance ISAs, you could end up with less money than you invested. This is due to charges on the plan being taken out by the manager when it begins.

    Also, the value of shares is dependent on the stock market at the time.

    You can click on the links below for different ISA options.

    •