ISAs can be seen as a complicated form of saving. However, at their core they are simply tax-efficient savings accounts in which you can invest your hard-earned cash.
Part of what makes them considered more complicated that ‘normal’ savings accounts is that ISAs have restrictions on how much you can put in each tax year and when you’re allowed to open a new account versus move your funds. To help, we’ve gathered together information on this year’s ISA allowance, as well as many other important taxation considerations. This includes the current income tax rates and personal savings allowance, for those who aren’t sure whether they need to worry about taxation on their savings returns, as well as pension rates, inheritance tax and much more.
If you don’t want to read all about what you can get taxed on this tax year, the most important thing you need to know when it comes to ISAs is that between 6 April 2020 and 5 April 2021 you have an allowance of £20,000, which can be placed in any form of ISA (i.e. a cash ISA, stocks & shares ISA, Innovative Finance ISA and the new Lifetime ISA) or across a combination of these. However, you can only put £4,000 of your overall ISA limit into a Lifetime ISA per tax year. Junior ISAs, meanwhile, have their own limit, which now stands £9,000 per tax year.
Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.