ISAs


ISAs (Individual Savings Accounts) are a form of tax-free savings options that were initially set up in the UK by the government in 1999. You can use an ISA to both save money and/or to set up stocks and shares savings accounts as you wish (subject to conditions) and any income that you make from these products will not be taxed no matter what your earnings are.

At the moment you can choose from two types of ISA account:




With cash ISAs you can only open and pay into one account a year and you can pay in a maximum of £3,600 as of 2008. The year here is given as the tax year which runs from April 6th to April 5th.

With stocks and shares ISAs you can hold up to £7,200 worth of stocks and shares or you can hold a mixed account with £3,600 as a cash component and the remaining balance as stocks and shares.

Both kinds of ISAs are readily available from all of the standard financial institutions and many other providers. In the past the government also offered an insurance ISA however this product was not popular and has been discontinued for new applicants.