Individual Savings Accounts (ISAs)

Individuals Savings Accounts (ISAs) offer an easy way to make tax efficient savings. The Government has confirmed that ISAs will remain indefinitely. When they were initially introduced, ISAs were only set to run until 2009.

The Government introduced changes to ISAs that came into effect on 6 April 2008. These changes include:

The abolition of the Mini and Maxi ISA distinction. From 6 April 2008 there are only Cash ISAs and Stocks and Shares ISAs.

All Personal Equity Plans (PEPs) automatically became Stocks and Shares ISAs on 6 April 2008 and are now governed by the ISA rules.

The annual ISA allowance has risen to £10,200. Up to £5,100 of the allowance can be saved in cash with one provider. The remainder of the £10,200 can be invested in stocks and shares with either the same or another provider.

Any, or all, of the money saved in Cash ISAs in previous tax years can be transferred to Stocks and Shares ISAs without affecting your annual ISA investment allowance.

Any money saved in the current tax year in a Cash ISA can also be transferred to a Stocks and Shares ISA. However, transfers must be the total value in the current tax year, in that Cash ISA, up to the day of the transfer. Once a transfer of this kind has taken place, the money is treated as if it had been invested directly into a Stocks and Shares ISA in the current tax year. It is then possible to save up to the balance of the £10,200 annual ISA allowance in ISAs in the current tax year, including up to £5,100 in a Cash ISA.

Investments in a Stocks and Shares ISA can go up as well as down and you may not get back your original investment. Investment in a deposit-based Cash ISA has guaranteed growth and the fund itself is guaranteed up to a limit of £35,000 with each financial institution.

Charges, Access and Terms (CAT) standards

There used to be Charges, Access and Terms (CAT) standards for ISAs, but these were withdrawn by the Government on 6 April 2005 with the introduction of the stakeholder range of products.

For more information, please contact us.