On the 6th of April 2024, the Individual Savings Account (ISA) celebrated it’s 25th Anniversary. When Gordon Brown, the then Labour Party Chancellor introduced them in 1999 it was seen as the rebranding of two existing schemes. The Tax Exempt Special Savings Accounts, better known as TESSAs and the Personal Equity Plans commonly referred to as PEPs.
Since their launch ISAs have undergone a few changes to keep them current.
What is an ISA?
The concept of an ISA is straightforward. It’s a savings or investment account you never pay tax on. Each tax year, you get an ISA allowance which sets the maximum you can save within the tax-free wrapper. You can pay any amount you like up to this maximum.
For the current 2024/25 tax year, the maximum you can save in an ISA is £20,000. This has not changed since 2017/18.
You can choose whether you want to invest the whole lot into one type of ISA, or whether you want to split the allowance between different types. If you choose to split it, you can’t invest more than a total of £20,000 across the different ISA types.
Use it or lose it.
You must save or invest by 5 April each year. Unfortunately, any unused allowance does not carry over to the next tax year. So, if you don’t use it, you lose it forever. You’ll get a new allowance on 6 April each year when the next tax year starts.
Any savings or investments which stay within the tax-free ISA wrapper until you withdraw the money. Individuals have nothing to put on a tax return.
When should I open an ISA?
The best time to open an ISA is early in the tax year so you can maximise the period of favourable tax treatment.
How Anstee & Co can help you with your financial planning
Saving or investing in an ISA is not right for everyone. Why not arrange a meeting with one of our independent financial planners today to see if it’s right for you?
The initial meeting is at our expense and is without obligation. Meetings can be arranged at a time and location that is convenient for you. This may be at your home, our office in Kettering or online using Zoom or Teams. The choice is yours.
Our expertise covers all areas of financial planning including, Investments, Pensions and Mortgages
If you have any thoughts or comments on this article, ” Happy Silver Anniversary for the ISA.”, then it would be great to hear your views.
Finally, the information contained in this article is for information purposes only and does not constitute financial advice. No action should be taken based on this information alone. Anstee & Co is authorised and regulated by the Financial Conduct Authority (FCA).