There are 4 types of Individual Savings Accounts (ISA):
cash ISA
stocks and shares ISA
innovative finance ISA
Lifetime ISA
You don’t pay tax on:
interest on cash in an ISA
income or capital gains from investments in an ISA
If you complete a tax return, you don’t need to declare any ISA interest, income or capital gains on it.
Putting money into an ISA
Every tax year you can put money into one of each kind of ISA. The tax year runs from 6 April to 5 April.
You can save up to £20,000 in one type of account or split the allowance across some or all of the other types.
You can only pay £4,000 into your Lifetime ISA in a tax year.
Example: You could save £15,000 in a cash ISA, £2,000 in a stocks and shares ISA and £3,000 in an innovative finance ISA in one tax year.
Example
You could save £11,000 in a cash ISA, £2,000 in a stocks and shares ISA, £3,000 in an innovative finance ISA and £4,000 in a Lifetime ISA in one tax year.
Your ISAs won’t close when the tax year finishes. You’ll keep your savings on a tax-free basis for as long as you keep the money in your ISA accounts.
What you can include in your ISAs
Cash ISAs can include:
savings in bank and building society accounts
some National Savings and Investments products
Stocks and shares ISAs can include:
shares in companies
unit trusts and investment funds
corporate bonds
government bonds
You can’t transfer any non-ISA shares you already own into an ISA unless they’re from an employee share scheme.
Lifetime ISAs may include either:
cash
stocks and shares
Innovative finance ISAs include:
peer-to-peer loans - loans that you give to other people or businesses without using a bank
‘crowdfunding debentures’ - investing in a business by buying its debt
You can’t transfer any peer-to-peer loans you’ve already made or crowdfunding debentures you already hold into an innovative finance ISA.
How to open an ISA
You can get an Individual Savings Account (ISA) from:
banks
building societies
credit unions
friendly societies
stock brokers
peer-to-peer lending services
crowdfunding companies
other financial institutions
Contact your provider directly for more information about how to open an ISA with them.
Withdrawing your money
You can take your money out of an Individual Savings Account (ISA) at any time, without losing any tax benefits. Check the terms of your ISA to see if there are any rules or charges for making withdrawals.
There are different rules for taking your money out of a Lifetime ISA
If your ISA is ‘flexible’, you can take out cash then put it back in during the same tax year without reducing your current year’s allowance. Your provider can tell you if your ISA is flexible.
Example
Your allowance is £20,000 and you put £10,000 into an ISA during the 2017 to 2018 tax year. You then take out £3,000.
The amount you can now put in during the same tax year is:
£13,000 if your ISA is flexible (the remaining allowance of £10,000 plus the £3,000 you took out)
£10,000 if your ISA is not flexible (just the remaining allowance)
Transferring your ISA
You can transfer your Individual Savings Account (ISA) from one provider to another at any time.
You can transfer your savings to a different type of ISA or to the same type of ISA.
If you want to transfer money you’ve invested in an ISA during the current year, you must transfer all of it.
For money you invested in previous years, you can choose to transfer all or part of your savings.
If you transfer cash and assets from a Lifetime ISA to a different ISA before the age of 60, you’ll have to pay a withdrawal fee of 25%.
Restrictions on what you can transfer
You can transfer cash from your innovative finance ISA to another provider - but you may not be able to transfer other investments from it.
Check with your provider for any restrictions they may have on transferring ISAs. They may also make you pay a charge.
How to transfer your ISA
To switch providers, contact the ISA provider you want to move to and fill out an ISA transfer form to move your account. If you withdraw the money without doing this, you won’t be able to reinvest that part of your tax-free allowance again.
Deadlines and complaints
ISA transfers should take no longer than:
15 working days for a cash ISA and a cash Lifetime ISA
30 working days for a stocks and shares ISA, investments held in an innovative finance ISA and stocks and shares in a Lifetime ISA
