ISA rules & limits

The sooner you start to invest in your ISA, the better as it gives you more potential for growth. But there is a limit to how much you can put into your ISA each year, called your ISA allowance. The ISA allowance is set for each tax year, which runs from 6th April one year to 5th April the next year. You’re only allowed to save up to your allowance in any tax year, though your spouse or partner has their own ISA allowance too that they can use.

The ISA allowance for the 2014/15 tax year is £11,880 until 30 June 2014. From 1st July the annual ISA subscription limit will increase to £15,000 as per the Budget announcement on 19th March 2014.

Currently you can split across a cash ISA and stocks and shares ISA, or choose to put all of it in a stocks and shares ISA. How you choose to split your allowance is up to you, as long as you don’t go over the maximum amount allowed for each type of ISA. For example, you can save a maximum of £5,940 in a cash ISA. The other £5,940 could go into a stocks and shares ISA with the same provider like Bank of Scotland, or with a different one. Or you might choose to invest the full £11,880 in just a stocks and shares ISA.

From 1st July you can choose to invest any remaining allowance in a cash ISA, a stocks and shares ISA or a combination of both providing you don't invest more than £15,000 in total during the 2014/15 tax year.

Here are some examples of how it could work (until 30th June 2014)

Cash ISAStocks and Shares ISATotal ISA Allowance
£2,880 £9,000 £11,880
£4,880 £7,000 £11,880
£5,940 (maximum cash ISA allowance) £5,940 £11,880
£0 £11,880 (maximum stocks and shares
ISA allowance)

Transferring money from previous tax year’s cash ISAs

In addition to the allowance of £11,880, you may want to invest more in a stocks and shares ISA.You can do this by transferring some or all of the money you have in a previous tax year’s cash ISAs into a stocks and shares ISA. This means that more of your money is invested in stocks and shares ISAs and has the potential to grow but remember, the value can go down as well as up and you may get back less than invested. But this doesn’t work the other way – you can’t transfer money from a stocks and shares ISA to a cash ISA.

Please remember that a stocks and shares investment is a medium to long-term investment and although you can take money out, you should look to invest for at least 5 years. You may need to have other savings to pay for things in the short-term.

You can also transfer cash ISAs held with other providers to your Bank of Scotland cash ISA. Find out more about switching a cash ISA.

Please note: Tax treatment depends on your individual circumstances and may change.
The value of a stocks and shares ISA can go down as well as up and you may get back less than you invested.