A cash ISA allows you to save money without paying any tax on the interest earned. Similar to a savings account, there are also many different types of cash ISAs, from fixed-rate to easy access.
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British ISAs
Invest in UK businesses with the new British ISA
A new type of ISA was announced during the Spring Budget, so here's everything you need to know before it becomes available
Investing can put your capital at risk. You may get back less than you originally invested.
What is a British ISA?
A British ISA - individual savings account - is a new way to invest in UK companies without paying tax on the interest or returns. The new ISA was announced during the Spring Budget by chancellor, Jeremy Hunt. He revealed plans to reform the ISA system and encourage more people to invest in UK assets.
It includes a £5,000 ISA allowance and this will be on top of the existing ISA allowance of £20,000. The chancellor commented that this ISA would give British savers the opportunity to benefit from the growth of UK businesses, and support them so they can continue to expand.
Further details about this ISA will be shared in the coming months, and this page will be updated as soon as we find out more information.
There are plans to reform the ISA system and encourage more people to invest in UK assets."
Who can open a British ISA?
The exact details about who can open a British ISA haven’t been confirmed yet, but as it involves investing it should follow similar rules to a stocks and shares ISA.
This means if you are aged 18 or over and a UK resident, you could be eligible for a British ISA.
What are the different types of ISAs?
Cash ISA
A cash ISA allows you to save money without paying any tax on the interest earned. Similar to a savings account, there are also many different types of cash ISAs, from fixed-rate to easy access.
Stocks and shares ISAs
A stocks and shares ISA is a tax-efficient way to invest. This is different to a cash ISA as it doesn’t hold savings in cash, instead it allows you to invest in a range of assets, including stocks and bonds. It’s important to remember that with investing, your capital is at risk and you might get back less than you put in.
Innovative finance ISA
An innovative finance ISA enables you to earn tax-free interest on peer-to-peer (P2P) lending platforms instead of cash or stocks. Peer-to-peer lending is when investors are paired with individuals or businesses, but there are risks involved as returns are never guaranteed. Plus, the money is not protected by the Financial Services Compensation Scheme if the platforms go bust.
Lifetime ISAs
A lifetime ISA is a type of savings account that helps people to save for their first home or retirement. The lifetime ISA limit is £4,000 and is part of the £20,000 ISA allowance. If a saver puts the maximum amount into a lifetime ISA each year, the government adds a 25% bonus which could be up to £1,000 every year. However, there are certain rules with this ISA, so read all the terms and conditions before saving.
What are the different types of ISAs?
Cash ISA
Stocks and shares ISAs
A stocks and shares ISA is a tax-efficient way to invest. This is different to a cash ISA as it doesn’t hold savings in cash, instead it allows you to invest in a range of assets, including stocks and bonds. It’s important to remember that with investing, your capital is at risk and you might get back less than you put in.
Innovative finance ISA
An innovative finance ISA enables you to earn tax-free interest on peer-to-peer (P2P) lending platforms instead of cash or stocks. Peer-to-peer lending is when investors are paired with individuals or businesses, but there are risks involved as returns are never guaranteed. Plus, the money is not protected by the Financial Services Compensation Scheme if the platforms go bust.
Lifetime ISAs
A lifetime ISA is a type of savings account that helps people to save for their first home or retirement. The lifetime ISA limit is £4,000 and is part of the £20,000 ISA allowance. If a saver puts the maximum amount into a lifetime ISA each year, the government adds a 25% bonus which could be up to £1,000 every year. However, there are certain rules with this ISA, so read all the terms and conditions before saving.
Pros and cons of investing
Pros
Usually beat savings returns over time
Can earn an income through dividends
If you invest through your pension you get tax relief
Cons
Your investments can go up and down, which can lead to stress
If you need your money when markets are down it won’t have time to recover
More knowledge is required than for saving
Investing can put your capital at risk. You may get back less than you originally invested.
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