An ISA, or individual savings account, is a savings account where all of the interest earned is tax free and doesn’t form part of your Personal Savings Allowance.
At the start of each new tax year (6 April), every UK adult receives an ISA allowance. For the 2018/2019 tax year, this allowance is £20,000. You can save the whole allowance in cash, in stocks and shares, in an innovative finance ISA, in a Lifetime ISA or in any combination of these permitted ISA types. Aldermore offers Cash ISAs only.
If you don’t use your allowance during the tax year, it will be lost – it can’t be rolled over to the next tax year. By making sure that you use your ISA allowance each year, your pot of tax free savings can continue to build year on year.