ISAs Explained 

Whether you’re just starting to save or already have money put away, it's always worth considering saving in an ISA.

What is an ISA?

ISA stands for Individual Savings Account. It’s a tax-efficient or even tax-free way to get a return on your savings. 

There are five main types of ISA:

Common questions

We specialise in savings, so we’re always up to speed with the latest rules regarding Cash ISAs and the options available to you. Below are the answers to a few common questions, but we’re happy to talk things through with you if you call into a branch or talk to us on 0345 850 1722.

The maximum amount you’re allowed to pay into ISAs during each tax year (6 April to 5 April) is called an ISA allowance. This year it’s £20,000 for adult ISAs. If you're eligible, you can use up to £4,000 of this in a Lifetime ISA.

The maximum you can pay into a Junior ISA  this tax year is £4,128.

You’re also allowed to leave your previous years’ allowances in your ISAs. So you’ll get the benefit of tax-efficient returns on your full balance, not just that year’s ISA allowance. 

Each tax year, you can put that year’s ISA allowance into a Cash ISA, a Stocks & Shares ISA, an Innovative Finance ISA, a Liftime ISA or a combination of the four. It's up to you how much you put in each, as long as you don't go over the total allowance between the four of them. If you're eligible for a Lifetime ISA, the maximum you can pay into one is £4,000.

When it comes to the next tax year, you may not need to open a new ISA. If you have one from a previous year, you may be able to pay your new allowance into that. 

When you open an ISA, you can switch your funds to another provider during the same tax year, as long as you transfer the balance in full and the account terms and conditions allow it. This is referred to as your current years allowance.

You can even transfer money between Cash ISAs, Stocks & Shares ISAs and Innovative Finance ISAs. You can transfer from one of these into a Lifetime ISA if you are eligible, but the amount transferred will come out of your Lifetime ISA allowance.

When the tax year ends, the funds in your ISA are referred to as previous years’ allowances. If the terms of your account allow it, you can transfer your previous years’ allowances to another provider, and you don’t always have to transfer the balance in full.

If you decide to move funds between ISAs it’s really important that you use your new provider’s official transfer process. If you just withdraw money from your ISA and open a new one it will be viewed as part of that year’s ISA allowance, and may lose its tax-free benefit. However, all of our easy access variable Cash ISAs are Flexible and you will not lose your tax-free benefit if you pay back in before the end of the tax year.

We won Best Cash ISA Provider and Best Savings Provider in the MoneySuperMarket Supers Awards 2016. So if you have any questions, no matter how big or small, you can talk to us.

If you’d like to invest in a Stocks & Shares ISA, your local Skipton Financial Adviser can help you find one that meets your requirements. We’ll explain all the options carefully, and make recommendations from our range of providers. Talk to us and we can make an appointment for you.

Stock market-based investments are not like building society savings accounts as your capital is at risk and you may get back less than you invested. The value of your investments and any income from them may fall as well as rise. The tax treatment of ISAs may be subject to change in the future.

Flexible ISAs

The government changed the ISA rules in 2016, giving providers the option to make ISAs flexible.

Transfer your ISA

Whether you would like to transfer your current Skipton ISA or an ISA from elsewhere, see our simple guide.

Personal Savings

From 6 April 2016 the Government has introduced the Personal Savings Allowance.

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