Turn your ISA allowance into a high score. How much of your £20K are you using?
The ISA allowance is £20,000 per tax year. This can be split across Cash ISA, Stocks & Shares ISA, Innovative Finance ISA, and Lifetime ISA. The LISA has a sub-limit of £4,000 within the overall £20,000.
A LISA is available to 18-39 year olds. You can save up to £4,000/year and the government adds a 25% bonus (up to £1,000/year). Use it for your first home (up to £450,000) or retirement (after age 60). Withdrawing for other purposes incurs a 25% penalty.
Cash ISAs offer guaranteed returns but typically below inflation. Stocks & Shares ISAs offer higher potential returns (7-10% historically) but with volatility. For 5+ year time horizons, stocks generally outperform. For short-term savings, cash is safer.
All growth within an ISA is tax-free — no capital gains tax, no income tax on interest or dividends. A higher-rate taxpayer with £100,000 in a taxable account earning 7% would pay roughly £1,400/year in tax. In an ISA, that's £0.
Yes! You can transfer ISAs between providers and between ISA types without affecting your current year's allowance. Always use the official transfer process — withdrawing and re-depositing uses your annual allowance.
Unlike pensions, unused ISA allowance does NOT carry forward. If you don't use your £20,000 allowance by April 5th, it's gone forever. This makes maximising each year's allowance especially valuable.