Individual Savings Accounts (ISAs)
Individual Savings Accounts (ISAs) help you save tax. This guide gives you some handy tips to enable you find the right ISA.

   How it works

ISA's allow you to protect up to £7,000 worth of assets from tax every year. This is a personal allowance.

For example a married couple would have a combined annual allowance of £14,000.

It is not just cash we are talking about here. Anything from unit trusts, investment trusts, life insurance policies and share portfolios can be protected from tax using ISAs. (click here to find out more about investment products)

But to keep the taxman at bay there are certain rules you have to abide by.

  • You have to be over 18 to invest in an ISA (although this age limit is due to be reduced to 16 shortly)

  • You only get one bite at the cherry. You get an annual ISA allowance but if you don't use it you lose it.

  • You can only invest up to £3,000 in cash, so to take up the full allowance you have to invest in other things such as stocks and shares.

  • You can put up to £1,000 a year into an insurance ISA - where you put money into a fund that invests in a mixture of shares, property and other securities.

  • If you wish you can put the whole £7,000 into stocks and shares.


     
     

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