Everything known so far about the UK ISA

As part of the 2024 Spring Budget, the Chancellor of the Exchequer, Jeremy Hunt, unveiled plans for a new UK ISA. Here’s everything known so far about this new savings and investment vehicle:

What is the UK ISA?

The UK ISA, or ‘British ISA’, is intended to open up more opportunities for consumers to invest in UK equity, with any gains being exempt from tax.

In his speech, the Chancellor said this will “ensure that British savers can benefit from the growth of the most promising UK businesses as well as supporting them with the capital to help them expand”.

What is the UK ISA allowance?

When it becomes available, you’ll be able to invest up to £5,000 per tax-year in the UK ISA, which will be additional to the existing ISA allowance. This may offer some consolation to savers who’d like to have seen an increase to the ISA allowance included in the Spring Budget 2024.

Until then, the annual ISA allowance remains at £20,000 and can be spread across cash ISAs, stocks and shares ISAs, Innovative Finance ISAs (IFISA) and one Lifetime ISA (LISA) in the 2024/25 tax-year.

When will the UK ISA become available?

No date was given in the Spring Budget for when the UK ISA will become available; the Government is due to consult on the finer details until June 2024.

In the meantime, you don’t have to wait if you want to invest tax-efficiently in UK assets. A stocks and shares ISA, for example, could allow you to invest in UK shares if you research and select your investments carefully.

However, it’s important to keep in mind your capital is at risk when investing. While it offers the potential for greater returns in the long-run than interest earned from savings, it’s also possible for your investment to decrease in value. If in doubt, consider seeking expert advice.