ISA information

ISAs, or Individual Savings Accounts, are tax-efficient saving and investment products.

There are four types of ISA; cash ISAs, stocks and shares ISAs, lifetime ISAs and innovative finance ISAs.
UK residents can only contribute to one of each type of ISA each tax year, up to a maximum allowance set by HM Treasury. There are exceptions for customers who have opened a separate ISA to pay in an Additional Permitted Subscription allowance following the death of a spouse or civil partner. No personal Income Tax or Capital Gains Tax is payable on ISAs.

What are the types of ISA?

Cash ISAs

Cash ISAs are savings accounts which pay tax-free interest and can be either fixed-term or open-ended. There is a low risk to the capital value of your money.

Stocks and Shares ISAs

Stocks and Shares ISAs allow you to invest tax efficiently in stock market linked investments such as managed funds, bonds, and individual company shares. While returns can be higher than a cash ISA, there’s always an element of risk associated with investing.

Innovative Finance ISAs

Innovative finance ISAs are a new type of ISA, which was launched in April 2016. They allow peer-to-peer lenders to loan money without paying any tax on interest earned.

Lifetime ISA

Introduced in April 2017 the Lifetime ISA will allow you to use some or all of the money to buy your first home, or keep it until you’re 60. You also receive a government bonus of 25% (up to £1,000) a year.

  Cash ISAs Stocks and Shares ISAs
Overview Cash ISAs are savings held in cash deposits.
 
You can contribute both a lump sum and regular payments.
Offer access to different investment funds.
 
You can contribute both a lump sum and regular payments.
Transfer information Can be transferred to:
  • Cash ISAs
  • Stocks & Shares ISAs
  • Innovative Finance ISA
  • Lifetime ISA

You can transfer between different providers

Minimum age You must be aged at least 16. You must be aged at least 18.
How much can I save or invest? The combined annual ISA allowance is £20,000 in the 2017/18 tax year. You can choose whether you invest your full allowance into a stocks and shares ISA, save it in a cash ISA, use it in an innovative finance ISA, or split your allowance in any combination of the three types of ISA.
Alternatively you can split your allowance by investing up to £4,000 in a Lifetime ISA and the remaining allowance between any combination of the other three types of ISA, as long as you don’t exceed £20,000 in total across your ISAs.
Potential returns Cash ISAs have an interest rate, which can be higher than a savings account. On closing your cash ISA, you’ll get back what you pay into the account, plus interest. The value of your stocks and shares ISA may go down as well as up and you may get back less than you invested. However they can offer greater potential for growth than cash ISAs.

Tax treatment depends on individual circumstances and may change in the future.

Understand the risks


Please remember that the value of an investment and the income from it can go down as well as up and you may get back less than you invested.

If you are in any doubt about making your own investment decisions we recommend you seek advice from a suitably qualified financial adviser.