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ISAs Explained /

ISA Allowance 2020/21

The maximum allowance you can save in an ISA each year

ISA Allowance 2020/21

The ISA Allowance is reviewed annually.

  • The 2020/21 ISA allowance is £20,000 per person
  • You have until 5th April 2021 to make use of it
  • HMRC set the allowance every year based on the Consumer Price Index (CPI) as of September. 
  • The savings limit for Junior ISAs is £9,000
  • You can spread your ISA allowance between a Cash, Stocks and Shares or Innovative Finance ISA or simply place all your savings in to one of these types of accounts. You can only have one of each.

What kind of Cash ISAs are available?

Instant Access Cash ISA

This type of cash ISA allows you to withdraw your money quickly and easily whenever you need it.

Easy Access Cash ISA

This type of cash ISA allows you to withdraw money within set boundaries - for example, you may only be permitted to make a certain number of withdrawals per year.

Fixed Rate Cash ISA

This type of cash ISA is intended to provide a better rate of interest in return for locking you money away for a set period of time. However, this is not necessarily the case, so it pays to research all your cash ISA options before making a commitment as accessing your money quickly can be difficult

Structured Deposit ISA

This type of cash ISA allows you the potential to earn higher returns than you'd usually receive from savings in a regular instant access cash ISA or fixed rate cash ISA, without risking your capital.

Your capital is protected up to a value of £85,000 by the FSCS. If your investment performs well, you'll receive your capital back at the end of the term plus any income you made on the initial deposit. In the event that your investment doesn't perform well you may receive no income or capital growth, but your initial capital will be repaid in full. So, if you put £1,000 into a structured cash ISA and the market does well over the term of the ISA, you might get £1,000 capital + 15% income when your plan matures.

In the event that the market does badly, you may not receive any returns, but you'll get your capital back.

Who are Cash ISAs Useful For?

An instant access cash ISA offers straightforward access to emergency savings, while a fixed rate cash ISA can sometimes provide a better rate of return for those prepared to lock their money away for a set period of time. Structured deposit plans, which offer returns linked to the markets while also offering capital protection, are also becoming a popular way for people to use their cash ISA allowance. As with all savings accounts, it's important that you shop around for the best deal.

For a selection of cash ISA options see our tables for latest products and options from leading market lenders.

Are there any ISA Rules?

While ISAs can be straight forward, there are some rules to follow and it’s useful to know before you get started:

  • The rules on ISAs have been relaxed since April 2016 and you can now choose how you split your savings
  • Some accounts have penalties if you withdraw early, particularly fixed rate accounts. Be careful to check your provider’s rules as you could leave with less than you invested if you close early
  • You must use a transfer form if you want to transfer accounts. If you don’t follow the transfer procedure and simply withdraw the money yourself then you lose all tax benefits for that year
  • Transferring your ISAs should take no more than 15 days although transferring from a cash ISA to a stocks and shares ISA can take longer
Important Risk Information:

This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.

Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.

High Income ISAs

High income ISA ideas:

ISAs Products

Cash ISAs

Fixed Rate & Instant Access ISAs:

Cash ISAs: 

Stocks & Shares ISAs

Types of Stocks and Shares ISA include: 

Stocks and Shares ISAs

Latest News

Investment ISA Pros and Cons

7th August 2020

The tax-free returns offered by an Investment ISA (otherwise known as a Stocks and Shares ISA) can be very tempting at first glance - however, as with any investment, it is important to weigh up the pros and cons. So we've put together a list of what you need to consider before opening your own Stocks and Shares ISA account. 

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