They are a great way to keep your money out of the UK tax system. When you put money into an ISA, it's safe from both UK income tax and capital gains tax.
Autumn Statement: There have been rumors for weeks that Individual Savings Accounts (ISAs) will get even better before they turn 25 next year. On Wednesday, the government confirmed these rumors.
ISAs came out for the first time in 1999. They are a great way to keep your money out of the UK tax system. When you put money into an ISA, it’s safe from both UK income tax and capital gains tax.
ISA rules and regulations have changed and new kinds of ISAs have come out over the years.
Jeremy Hunt has laid out a plan for ISAs that aims to make some of these rules easier to understand. The rate of National Insurance may be going down, which could be good news for people who save and invest in ISAs.
The political scene changes all the time, of course. So, even though the government has said that reforming the ISA is a top priority, these changes aren’t yet a done deal.
This piece isn’t advice for you personally. We’ve seen that tax and ISA rules can change, and the benefits you get will rely on your situation. Ask for help with your money if you’re not sure what to do.
“Savers and investors will be glad that the chancellor took the time to give ISAs some much-needed attention. This will help make sure that this much-loved piece of furniture stays in place for the future.”
In charge of personal finances is Sarah Coles.
Some of the most important ISA news in Wednesday’s fall statement was:
You can’t add to your ISA for the 2024–25 tax year.
Some people wanted yearly allowances to be raised, but the government decided to keep them the same for the next tax year (6 April 2024–5 April 2025). The total amount you can put into an ISA will stay at £20,000 per tax year.
At the moment, you can put up to £4,000 per tax year into a Stocks and Shares ISA, a Cash ISA, an Innovative Finance ISA, or a Lifetime ISA. This amount goes toward the overall £20,000 limit.
It will stay at £9,000 for Junior ISAs.
Being able to put money into the same kind of ISA through different banks
Since April 2024, you can hold ISAs of the same type in more than one place. Those who save money in a Cash ISA may be able to get better rates or mix set rates with easy access.
This also helps protect people who put money into more than one type of ISA during the same tax year. This is simple to do if you use Direct Debit to put money into an ISA. With the change, there is no longer a chance of breaking the rules.
So too, this will give people who save and invest in ISAs more freedom and power starting in April 2024. When it comes to current year ISA changes, the rules say that you either have to move all of your that type of ISA from the current tax year or nothing at all.
No matter when you signed up, you will be able to choose how much to move.
Don’t have to reapply for ISAs you already have every year.
Right now, people who want to save or invest in an ISA have to reapply for the ISAs they already have if they haven’t paid any fees for one tax year. Getting rid of this rule should make things clearer and cut down on extra paperwork that isn’t needed.
All adult ISAs now have an age cap of 18 or older.
For Cash ISAs, the rule only affects people who are 16 years old or older, which is the minimum age to start an account. From April 2024 on, the 18+ rule will be the same as other adult ISAs. 16- and 17-year-olds can still start a Junior ISA and save money in it.
Some small shares will be able to be used in an ISA.
It’s possible that buyers who would not have been able to buy certain shares otherwise will now be able to do so through an ISA.
UK savers, investors, and their families already have a lot of choices when it comes to ISA changes.
You can use this year’s annual limit right now, not just in the 2024–25 tax year. It’s simple to start right away. It’s possible to put more money into your ISA before the end of the tax year on April 5, 2019, when the tax year ends.
You can get a Stocks and Shares ISA, a Cash ISA, a Lifetime ISA, or a Junior ISA for your kids through HL. Plus, you can already choose how to spend your ISA limit between investments and cash.
Like, you could put £5,000 into a Cash ISA and the rest, £15,000, into a Stocks and Shares ISA.
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