ISAs represent a tax-efficient container in which to place cash savings and investments in equities, bonds and collectives.

An ISA is available to all UK resident individuals and to Crown servants (for example, those in the UK’s armed forces, diplomatic service or overseas civil service) and their spouses or civil partners who are not resident in the UK.

To open an ISA:

• You must be over the age of 18 for cash ISAs, stocks and shares ISAs.
• You cannot hold an ISA with or on behalf of someone else.
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Frozen ISA Allowances for the 2024/2025 tax year

• The government has frozen the these limited for this tax year (6 April 2024 - 5 April 2025). This means the overall ISA Allowance is still £20,000 per tax year.
• You can currently split your allowance between a Stocks and Shares ISA, Cash ISA, and Innovative Finance ISA* and a Lifetime ISA (up to £4,000 per tax year which counts towards the overall £20,000 limit).
• The Junior ISA allowance will stay at £9,000.

Flexibility to pay into the same type of ISA with different providers

• This will make it easier to have ISAs of the same type in different places in the same tax year (from April 2024). It could offer Cash ISA savers the chance to go after more competitive rates more easily, or pick and mix easy access and fixed rates.
• It also helps protect those who accidentally pay into more than one of the same type of ISA in a single tax year. This is easily done if paying into an ISA by Direct Debit. The change removes that risk of breaking the rules.

Allowing partial transfers between providers

• In a similar way, this will give ISA savers and investors greater flexibility and control. The rules currently force an all-or-nothing approach to current year ISA transfers – you have to transfer your entire ISA of that type from the current tax year, or nothing at all.
• The change is expected to mean you'll be in charge of how much you want to transfer, no matter when you made the subscription.

No need to reapply for existing ISAs each year

• ISA savers and investors are currently required to, in essence, reapply for ISAs they already hold when there's been a gap of one tax year where no subscriptions were paid. Removing this rule should reduce the potential for confusion and cut down on unnecessary red tape.
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New 18+ age limit for all adult ISAs

• This rule only directly impacts Cash ISAs, where the minimum age for opening an account is currently 18 years old. 
• If, at 5 April 2024, an individual is 16 or 17 and does not have an existing cash ISA, they will be eligible to apply for, and subscribe to, a single cash ISA in any tax year until their 18th birthday.

Designed to encourage new saving they are attractive to investors seeking a tax-efficient investment vehicle with the potential for higher returns. There is usually a low level of minimum subscription and no minimum period of investment.

An ISA enables you to accumulate savings in a tax efficient manner as all gains in the hands of investors are free from tax, making them particularly attractive to higher rate taxpayers.

An ISA can contain cash deposits, investments in equities, bonds and collectives.

For the 2024/25 tax year, you can choose to pay in one of the following:

• £20,000 to a cash ISA and nothing to a stocks & shares ISA.
• £20,000 to a stocks and shares ISA and nothing to a cash ISA.
• A combination of amounts between a cash and a stocks & shares ISA, up to the overall annual limit of £20,000.

You can only open one cash ISA and one stocks and shares ISA to put new money into each tax year. But you can also open other ISAs to transfer old ISAs into.

Withdrawals from an ISA can be made at any time with all gains free from tax but it is only possible to hold one ISA per tax year, so if an ISA is closed within the same tax year that it was opened, another one cannot be started until the next tax year.

ISAs can be transferred from one provider to another, as long as the new provider accepts transfers. This is often done with a cash ISA after it has been held for a year as previously attractive interest rates drop dramatically when short-term bonuses and fixed terms come to an end. The transfer is initiated through the new, receiving, provider who will require you to supply details of the original account and will manage the whole transfer process. Transfers should not be done manually by withdrawing the investment, closing the account, and re-investing it in the new account, as this removes the tax-free interest status of your investment.

The current year's allowance is unaffected by anything transferred from previous years so you can transfer previous investment to a new ISA and open a second ISA for new contributions if you wish, as long as you don't contribute to both.

*please note advice on Innovative ISAs is not available through all financial planning institutions

Individual Savings Accounts for children or Junior ISAs were introduced in November 2011 replacing Child Trust Funds. They are long-term, tax-efficient savings accounts for children who

• are under 18
• live in the UK
• have not invested in a Child Trust Fund account.

If your child lives outside the UK, they can only open a Junior ISA if you are a Crown servant (for example, you work in the UK’s armed forces, diplomatic service or overseas civil service) and the child depends on you for care.

A child cannot have a Junior ISA as well as a Child Trust Fund account. A Junior ISA can be opened and the trust fund transferred into it.

There are two types of Junior ISA, namely a cash Junior ISA and a stocks and shares Junior ISA. A child can have one or both types at any one time but the total annual amount which can be paid into either or both combined is £9,000 (tax year 2024/25).

If the child is under 16 the account must be opened by someone with parental responsibility, e.g. a parent or step-parent, who then becomes the 'registered contact' and the only one who can change the account or provider. They should also keep all paperwork and report on any change of circumstances.

Anyone can put money into the account (providing the annual limit is not exceeded) but only the child can take it out when they are 18 years old. If they choose not to take it out or invest it in a different type of account, the Junior ISA will automatically become an adult ISA.

The money in the account can only be withdrawn before the child is 18 under two conditions:

• The child is terminally ill, in which case the 'registered contact' can take the money out
• The child dies, in which case the money will be paid to the person who inherits the child's estate.