ARTICLE · 24 FEBRUARY 2024

Individual Savings Accounts

Gerald Edelman

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Individual saving accounts (ISAs) have income tax and CGT advantages.

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Individual saving accounts (ISAs) have income tax and CGT advantages.

You can currently invest in one cash ISA, one stocks and shares ISA and one innovative finance ISA in each tax year. This is set to change from April 2024. ISAs are free of UK tax on investment income and capital gains. If you are aged 18 to 39, you can also invest up to £4,000 in a lifetime ISA. However, the maximum investment limit of £20,000 (for 2023/24) applies across all four types of ISA.

Lifetime ISAs

The government adds a 25% bonus to investments of up to £4,000 a year in a lifetime ISA. You can use these savings to help buy a first home (but be wary of the property price cap of £450,000) or keep the funds for retirement. A lifetime ISA will be a more attractive approach to retirement saving than a traditional pension for some, or you can, of course, opt for both forms of pension saving.

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