Posted 2 years ago by Investory spot

What is an ISA?

What is an ISA?

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Put simply, an ISA – an individual savings account – is a savings account with tax-free returns. Every tax year you have an ISA allowance: a certain amount of money, decided by the government, that you can put into your ISAs. Any interest you gain from your ISAs will never be taxed.

This tax year, from 6th April 2020 to 5th April 2021, the annual ISA allowance is £20,000. After the 5th of April you will have a brand new ISA allowance – and your previous allowance, if you didn’t put away the full £20,000, doesn’t roll over.

If you keep putting away a chunk of money every year, you could eventually generate a large amount of tax-free income from your ISAs.