What Is An ISA?
An Individual Savings Account (ISA) is a tax-efficient wrapper that can sit around either cash or stocks and shares investments.
Types of ISA
With a cash ISA, you don’t pay tax on any interest on savings. With a stocks and shares ISA, you don’t pay tax on any dividends interest or capital gains you’ve made on your investments.
What type of ISA should I choose?
You have the freedom to choose what sits within your tax-efficient ISA – it can be investments that include cash, bonds or equities or a combination of all three. However the UK government sets an annual allowance on how much you can invest in an ISA - for the 2018/19 tax year the limit is £20,000.
Only UK residents are eligible for ISAs. You need to be aged 16 years or over to set up a cash ISA account in your own right; but 18 years or over to invest in a stocks and shares ISA. You can only take out one type of ISA per tax year. Tax rules can change.