Making the most of ISAs

An introduction to ISAs

Individual Savings Accounts, universally known as ISAs, began life as relatively simple savings plans in 1999, but over the past 21 years the rules surrounding them have become ever more complex.

A May 2018 report on savings tax from the Office of Tax Simplification (OTS) suggested that “there is scope for a wider full review of the current ISA landscape, to make the regime simpler and more accessible”.

The government’s website says there are only four categories of ISA – cash ISAs, stocks and shares ISAs, innovative finance ISAs, and Lifetime ISAs – but variants exist for specific investment needs.

This guide will explain how the main variants work, in order of their original launch date.

The Guide covers the following topics:

  • The types of ISA available
    The ISA family includes a range of products suited for a variety of investment plans
  • The investment options
    How you can use ISAs for cash savings, stock and shares and more
  • Investment limits
    The amount you can contribute each tax year depends on the type of ISA
  • How ISA investments are taxed
    How the tax privileges work in practice, for each type of ISA
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This publication is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this publication. The Financial Conduct Authority (FCA) does not regulate tax advice, so it is outside the investment protection rules of the Financial Services and Markets Act and the Financial Services Compensation Scheme. This publication represents our understanding of law and HM Revenue & Customs practice as at 8 September 2020.