How do ISAs work?

Individual Savings Accounts (ISAs) are a popular tax-free savings option. You won’t pay tax on any interest your account generates or income and capital gains from the investments within your ISA.

There are four main types of ISA, which are as follows:

In a single tax year, you can currently save up to £20,000 in an ISA. This allowance can be split across the different ISA types, or in a single account. The only exception is the Lifetime ISA, as you can only pay in a maximum of £4,000 in a single tax year.

How does a stocks & shares ISA work?

With a stocks & shares ISA, the money you put into the account is invested into an investment vehicle, which could be stocks and shares or bonds, property or commodities.

The return you receive depends on how successful your investment is, as markets can fluctuate.

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