When you save or invest in an ISA you don’t pay tax on any interest accrued. The UK tax year runs from 6th April until the following 5th April and during this period you can invest up to £20,000.
Can you have more than one ISA?
You can open multiple ISAs, but there is a limit on how you can spend your £20,000 balance each tax year. As a maximum per year you can pay into:
- 1 Cash ISA
- 1 IFISA
- 1 Lifetime ISA
- 1 Stocks and shares ISA
You can split your allowance across the four different ISAs however you’d like, or simply put your money into one. However, check any limitations of each ISA, as some have investing or savings caps.
Cash ISA
The original ISA, a cash ISA is similar to a traditional savings account, the key points of difference being that there is a limit as to how much you can hold in it and, of course, that you don’t pay any tax on the interest earned.
There are three types of cash ISAs:
- Fixed-rate cash ISAs which requires cash to be committed for a fixed period. You will receive a fixed, and typically higher rate of interest, but will not have access to your cash until the end of the fixed period.
- Regular savings cash ISAs which require a regular deposit of a certain amount of money each month. These typically pay a fixed-rate of interest over a fixed period.
- Instant access cash ISAs which, unlike the aforementioned, don’t require you to lock away your funds. Typically these offer lower and / or variable rates of interest.
Lifetime ISA
With the Help to Buy ISA closing its doors to new savers in November 2019, it is predicted that attention will be turned to the Lifetime ISA. Launched in April 2017, the Lifetime ISA is available for those aged over 18 and under 40. Its primary function is to help first-time buyers get a foot on the property ladder. It can also be used as an investment vehicle for retirement, or both.
Savers can deposit £4,000 into the ISA each year until they are 50 and the government will add a 25% bonus to any savings.
Innovative Finance ISA
Launched in 2016, the IFISA allows savers to use some (or part) of their annual ISA investment allowance to receive tax-free interest and tax-free capital gains on funds let through FCA-regulated Peer-to-Peer Lending platforms.
Stocks and shares ISA
Investing in a stocks and shares ISA protects your money with a tax free wrapper, no matter how much return your cash generates. All of Wellesley’s retail investment bonds can be held within a stocks and shares ISA.
The Wellesley Property Bond is currently available to invest in and can return investors up to 4% per annum.
If you are interested in holding your ISA allowance with Wellesley you can benefit from:
- Investing in retail bonds that are regulated and listed on a regulated stock exchange
- Earn tax-free interest on up to £20,000. (Please bear in mind, tax treatment depends on the individual circumstances of each client and may be subject to change in future.)
- A free account with no hidden fees or charges
- A fixed-term, fixed-rate investment, so you know how much interest you will earn and when.
You can register online or download and complete this form to open a free Wellesley ISA.. If you have any questions at all, please contact us on 0800 888 6001 or [email protected].