Society of Savers

5 April 2019

Learn about ISAs

ISAs are a great way of making your savings work harder, because you don’t have to pay a single penny of tax on the interest you earn. That means all the interest we pay, you keep for yourself. Perfect for helping you reach your savings goal faster.

1. They’re tax-free*

Interest earned on an ISA is tax free, which means that you don’t pay any tax on it. All the interest that is paid to you, you keep for yourself. Some ISAs offer a monthly interest option too, if you want a regular income from your ISA savings. Interest earned on ISAs doesn’t count towards your personal savings allowance. 

2. You can start with £1 

Many cash ISAs can be opened with a minimum amount of just £1. 

3. Some are flexible

You can take money out and replace it before the end of the same tax year without it affecting your current year’s ISA allowance.

4. Transfer between ISAs

Depending on your account terms you may be able to transfer some or all of your ISA balances. You can transfer your money as long as the account accepts ‘transfers in’. You can also transfer money held in a Stocks & Shares ISA to a Cash ISA - and vice versa with some providers.

Make sure you follow the correct ISA transfer process and don’t withdraw the funds in your ISA to move your money across, as you will lose the tax-free benefits of your ISA. Instead, you'll need to give your current provider instructions to transfer it to your new provider, which usually involves filling out a simple form for the new provider.

5. You can still access your money in a fixed-rate ISA

If you have savings in a fixed-term non-ISA savings account, you might not be able to touch your money until the end of that term. However, banks and building societies aren’t allowed to do this with ISAs. So, although you might need to give a notice period, and in some instances may also be charged, you’ll always have access to your money.

6. ISA inheritance

In the event of death, ISA allowances can be passed on to your surviving spouse or civil partner. If you’d like to find out all the details, get in touch.

7. Your situation might change

With your savings in an ISA you won’t pay tax on your interest, even if for example your income increases and takes you to a higher tax band, which would result in your Personal Savings Allowance reducing.

To find out more about ISAs, take a look at our Society of Savers online hub.  Here you'll find some money saving tips, tools and videos to help you get started on your savings journey. You'll also find some informative videos to help you understand more about ISAs and the Personal Savings Allowance.

 

 

 

 

Published: 05/04/2019

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