>> What is an ISA?

What is an ISA?

Nobody really likes paying tax on their income. So when you have to pay tax on your savings interest, or on the gains you make from investments, you probably start to wonder what's the point?!

This is where Individual Savings Accounts (or ISA's as they are more commonly known) come in. ISAs are a great way to save and invest where the gains you make are sheltered from the taxman.

The good news is that the ISA rules have changed slightly since April 2008 to make them much simpler. These are as follows :

You can invest a total of £7,200 each tax year into an ISA
There are only two types of ISA - a Cash ISA and a Stocks and Shares ISA
You can invest up to £3,600 in a cash ISA each tax year
You can invest up to £7,200 in a Stocks and Shares ISA each tax year
You can open one Cash ISA and one Stocks and Shares ISA in each tax year so long as the £7,200 overall limit is not exceeded, e.g. you could invest £2,000 in a Cash ISA and £5,200 in a Stocks and Shares ISA.
All PEPs have now become Stocks and Shares ISAs
All Mini Cash ISAs, TESSA-only ISAs, and the cash component of Stocks and Shares ISA from before April 2008 have become Cash ISAs

ISAs can only be held individually and cannot be held as a joint account, and account holders must be 18 or over (16 or over if you are only investing in a Cash ISA), and a UK resident.

If you are in a position to be able to save or invest then sheltering your money from the taxman with an ISA is easier than ever before!