ISAs are tax-free savings accounts available to UK residents over the age of 16. Various types of ISA are available, and if a better rate is available elsewhere, it’s possible to transfer ISAs to other providers. The 2019/20 ISA allowance allows you to save up to £20,000 tax-free.


Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 06/12/2019

Cash ISA

This is a tax-free savings account, where the funds are held by a bank or building society. Your capital is not at risk.

See which ISA accounts are available on our charts.

Child Trust Fund

Child Trust Funds (CTFs) were an initiative set up by the Government in 2002, with the idea that every child would have some savings behind them when they turned 18, and to encourage the savings habit. However, from 2011, this programme was replaced with the Junior ISA (JISA) scheme. It is now simple and easy to transfer a CTF to a JISA.

Child Trust Funds were only available from 1 September 2002 to 2 January 2011.

Flexible ISA

Some ISAs allow you to withdraw funds and then replace these during the same tax year, without reducing your ISA allowance. 

Help to Buy ISA

A Help to Buy ISA was a tax-free savings account to help first-time buyers save for a house deposit. These accounts are now closed to new savers, but existing Help to Buy ISA holders can continue to save into them until November 2029.

Innovative Finance ISA

This is an investment in peer-to-peer lending or crowdfunding debentures. Funds invested are used to lend to individuals or companies in return for a regular and set rate of interest. This means they come with the risk that you might lose your capital.

Investment ISA

An investment ISA is also called a stocks and shares ISA, and any returns are not liable for tax. An investment ISA comes with greater risk as you could lose your initial investment and returns are not guaranteed.

Learn more

Learn more about stocks and shares ISAs (also known as investment ISAs). Read investment ISAs versus cash ISAs and how to move your cash ISA to a stocks and shares ISA.

ISA

An individual savings account (ISA), is a savings account with a tax-free wrapper. This means any interest earned is not liable for tax. ISAs come with a maximum amount you can invest each tax-year, also known as your ISA allowance (see below).

ISA allowance

The ISA allowance is the maximum amount you can save into an ISA within that tax year. This is set by the Government and is currently £20,000 for the 2019/2020 tax year. You can save into a cash ISA, a stocks and shares ISA, an Innovative Finance ISA and a Lifetime ISA all in the same tax year. However, you cannot save into more than one of each type in the same tax year.

Read more about the ISA allowance.

ISA provider

This is the organisation who is holding your ISA funds. This can be a bank, building society, credit union, friendly society, stockbroker, peer-to-peer lender, crowdfunding company, as well as other financial institutions.  

ISA transfers in

Savers can transfer their ISA pot to a new ISA if the product accepts a transfer in from that type of ISA.

ISA transfers out

Savers can transfer their ISA pot out to switch it to a new ISA provider. This is instead of making a withdrawal and maintains the ISA pot’s tax-free status.

Junior ISA

A Junior ISA is a tax-free savings account designed for those aged under 18. The maximum deposit is currently £4,368 for the 2019/202 tax year.  

Lifetime ISA (LISA)

This is an ISA specifically to save for a deposit for a first home or for retirement. There are set limits on how much you can pay into a LISA and you must be aged 18 to 39 to open one. A Government bonus of 25% of your savings is added, up to £1,000, each year.

Personal Savings Allowance (PSA)

PSA is the amount of savings interest you can earn before needing to pay any tax. Basic rate taxpayers can earn £1,000 in interest while higher rate taxpayers can only earn £500 before needing to pay tax. Those at the 45% tax level must pay tax on all the interest they earn from savings.

Further reading

Read how your savings are taxed using our helpful guide. 

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.

men walking across the road with isa sign

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