ISAs Explained
What an ISA actually is
An ISA isn't an investment itself — it's a wrapper. Anything held inside is free from Income Tax, Capital Gains Tax and Dividend Tax, and you never have to declare it. You can pay in up to £20,000 across all your ISAs each tax year.
The allowance is "use it or lose it" — it resets every 0 April and can't be carried forward.
The four main types
Cash ISA (savings, safe); Stocks & Shares ISA (investments, for the long term); Lifetime ISA (first home or retirement, with a bonus); Junior ISA (£9,000/yr for under-18s). You can split your one £20,000 allowance across types in the same tax year.
The Lifetime ISA bonus (free money, with strings)
Open at 18–39, pay in up to £4,000/yr, and the government adds 25% — up to £1,000/yr free. Use it for a first home up to £450,000, or from age 60.
Making the most of it
A common move is "Bed & ISA": moving existing investments into an ISA wrapper to shelter future gains (mind any CGT on the sale). Spouses can also inherit an ISA allowance. This is education, not advice — for your situation, speak to a regulated adviser.
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