Individual Savings Accounts (ISA) are a great savings alternative to normal savings accounts, as they provide individuals with tax free savings, so you don't have to pay any tax on the interest you earn.
ISAs were introduced by the government on 6 April 1999 to replace the earlier Personal Equity Plans (PEPs) and Tax-Exempt Special Savings Accounts (TESSAs). ISAs are seen to encourage savers to put away cash and save for the future.
Every tax year (April 6th – April 5th) everyone over the age of 16 is given a £11,280 tax free savings allowance that can be used to invest in stocks and shares, cash ISAs or a combination of the two. You can only ever invest up to £5,640 into a cash ISA within any one tax year, but you are able to use the full £11,280 to invest into a stocks and shares ISA.
You can only ever open one cash ISA and one stocks and shares ISA within a single tax year, but it is possible to transfer existing balances from one provider to another. Compare all ISAs at Which4U
