- An Individual Savings Account (Isa) is a wrapper that allows you to grow savings free of tax.
- You have an annual ISA allowance which is the amount you can add to the account in any given year - the current allowance is £20,000 (for 2020/21 tax year).
- There are different types of Isa but one allowance for all your accounts.
- You have until the 5th of April each year to use up your ISA allowance - if you don’t it will be gone.
Savers and investors take note. All of the money outside of your pension can be subject to taxes on profits and dividends. But the money in Individual Savings Accounts (Isa) is exempt from these taxes. That is why it is efficient to use up your allowance where you can.
Isa tax benefits