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What are ISAs

  • ISA is short for ‘Individual Savings Account'.
  • ISAs allow you to get the income and returns from you savings and investments without having to pay any income or capital gains taxes.
  • There are two types of ISA - cash ISAs and stocks and shares ISAs. Investment products such as authorised unit trusts, can be held in the stocks and shares ISA.
  • Cash ISA is where you save in a secure deposit account.
  • Stocks and shares ISA is where you invest on the stock market in unit trusts.
  • The maximum cash ISA investment allowance is £3,600^.
  • The maximum you can invest in a stocks & shares is £7200^ per tax year (less any amount you save in a cash ISA).
  • Cash ISAs are available to all UK residents aged 16 or over.
  • Stocks and shares ISA s are available to all UK residents aged 18 or over.
  • You are only allowed to contribute to one cash and/or one stocks and shares ISA per tax year.
How to use your 7200^ tax allowance, £7,200 Stocks and Shares ISA or Up to £3,600 cash ISA plus Stocks and Shares ISA remaining balance of £7,200

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^ If you were born on or before 5th April 1960, increased ISA limits apply from 6th October 2009. You can invest up to £5,100 each tax year in a Cash ISA and your overall annual ISA investment allowance is £10,200. These higher limits will apply to all eligible ISA investors with effect from 6th April 2010.