Even a savvy saver can find the jargon around ISAs and tax-efficient savings daunting. If you\u2019re thinking of moving your money but don\u2019t understand what ISAs are or how they work, follow our handy guide to help you take advantage of tax-free savings and our best ISA deals from our range.<\/p>\n
ISA simply stands for \u2018Individual Savings Account.\u2019<\/p>\n
There are two are two types of ISA \u2013 Cash ISAs and investment ISAs.<\/p>\n
A cash ISA is like a normal savings account but offers the following key benefits:<\/p>\n
An investment ISA is a tax efficient wrapper for your investments which have certain qualifying criteria. (I.e. You must be at least 18 for an investment ISA and resident and ordinarily resident in the UK for tax purposes.)<\/p>\n
If you deposit funds in an investment ISA (also known as a stocks and shares ISA), your money will be invested in the stock market.<\/p>\n
Investment ISAs are free from capital gains tax and income tax but the tax credit on dividend income received is not reclaimable. Investment ISAs have the potential to outperform cash savings but you need to be aware that, as these ISAs operate within the stock market, their value at any given time can fluctuate as returns depend on the performance of the underlying investments \u2013 so you can lose money as well as make money.<\/p>\n
Before moving your money, you may want to consult your financial adviser to identify the best ISA deals and investment plan to suit your needs.<\/p>\n
Remember, eligibility for ISAs depends on your individual circumstances, and the rules around them \u2013 such as their tax treatment \u2013 could change in the future.<\/b><\/p>\nHow much can I invest?<\/h2>\n
All UK nationals have an annual ISA allowance<\/a> of \u00a310,200.<\/p>\n It\u2019s important to think about your attitude to risk before investing in an investment ISA because the returns are not guaranteed, and you may end up with less money than you originally put in because the value of investments can go down as well as up.<\/b><\/p>\n ISAs are not always the easiest thing to get your head around and this confusion leads many to avoid them and miss out on the tax free benefits that ISAs bring. Here we attempt to demystify some of the more popular jargon surrounding ISAs from the difference between cash and investment ISAs to investment limits and risks involved.<\/p>\n","protected":false},"author":3,"featured_media":1799,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[148,149,146,147],"acf":[],"yoast_head":"\n\n
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