What is an ISA?

An ISA is an individual savings account. that where you do not pay tax on as long as you are a UK resident.

What’s an ISA allowance?

This is the maximum amount you can pay into the ISA in any one tax year and is currently £20,000 per person for the 2020/21 Tax Year.

What are the different types of ISAs?

There are currently 3 main type of ISAs that you can open. These are Cash ISAs, Stocks and Shares ISA and a Lifetime ISA. Some of you may also have a Help to Buy ISA* however you can no longer open this type due to the new Lifetime ISA that was introduced.

There is a fourth type of ISA and it is called a Junior ISA. These are only available to UK residents that are under 18 years of age. Parents or guardians with parental responsibility can open a Junior ISA and manage the account, but the money belongs to the child.

Why should I open an ISA?

The main benefit of an ISA is to give you tax efficient savings. If you do not use your allowance in the Tax year, then unfortunately it does not roll over to the following year. If you do not use it, you lose it.

Which ISA is best for me?

This is personal to everyone. It depends on your needs and circumstances and the best way to find out would be to talk to one of our Advisers.

When can I open an ISA?

Every tax year you can put money into one of each kind of ISA. The tax year runs from 6 April to 5 April. For tax year 2020/21 you can save up to £20,000 in one type of account or split the allowance across some or all the other types. The only exception is that you can only pay £4,000 into your Lifetime ISA in a tax year.

How is an ISA taxed?

An ISA is free of income tax and capital gains tax. It may be taxable on death if your estate is liable to inheritance tax and you are not married.

What are the returns on an ISA?

That depends on which ISA you have and where it is invested.

The value of an ISA with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested. An investment in a Stocks and Shares ISA will not provide the same security of capital associated with a Cash ISA.

The favourable tax treatment of ISAs may not be maintained in the future and is subject to changes in legislation.

*Please note, Help to Buy and Lifetime ISAs are not available through St. James's Place.