ISA - Individual Saving Account
Posted - 02/05/12
ISA's are a saving account which are not currently taxed by the
UK government. Normal current and saving's accounts are taxed,
- For normal rate tax payers they are taxed - 20%
- For higher rate tax payers, they are taxed - 40%
The advantage of an ISA is that neither of the above is applicable
to them. The drawback to an ISA is that there is a limit to the
amount of money which can be invested into them for each tax year.
The amount, or allowance, which can be placed into the ISA usually
changes each year - to take into account inflation etc. At present,
you can currently invest £11, 280, or, £5,640 for a
There is an age limit for investing into an ISA, which is currently
16 or over. If you have forgotten, the tax year runs from the 6th
of April till the 5th of April of the following year. Therefore,
you can only invest your full allowance once during that time period.
You can remove funds from an ISA at any point in time, that's assuming
that you applied for an easy access ISA.