ISA guides tagged “ISA basics”

What gov.uk says about a Lifetime ISA, workplace pensions and private pensions, and how they differ on paying in, tax and taking money out.

Who can open each type of ISA, what a provider asks for, how a transfer in differs from a new payment, and where gov.uk pages stay silent.

How tax applies to money paid into, held in and taken out of an ISA and a pension, as gov.uk describes it. Differences only, not advice.

What an Innovative Finance ISA is, how it differs from cash and stocks and shares ISAs, and what gov.uk and the FSCS page say about tax, risk and transfers.

NS&I says Premium Bonds do not earn interest and that an annual prize fund rate funds a monthly prize draw. gov.uk says you do not pay tax on interest on cash in an ISA. This guide sets out what each source says, with sources.

The usual ISA pitfalls are withdrawing instead of transferring, paying in over the allowance, Lifetime ISA age limits, and assuming protection that does not exist. Here is what the rules say about each.

According to gov.uk, if you complete a tax return you do not need to declare ISA interest, income or capital gains on it. Money held outside an ISA is treated differently.

A flexible ISA is one whose terms let you take cash out and put it back in the same tax year without using up more of that year's allowance. Whether an ISA is flexible is set by the provider's terms, so it is worth asking.

gov.uk says you do not pay tax on interest on cash in an ISA. Interest in a normal savings account can be taxed once it goes beyond your tax-free allowances. Here is how the two compare, with a worked example.

gov.uk says you cannot hold an ISA with someone else. Reading the limit as applying to each adult, giving a couple two between them, is this site's own interpretation. Here is how that works, with a worked example.

The ISA tax year runs from 6 April to 5 April, and the £20,000 allowance is set for each tax year. gov.uk describes no carry forward of an unused amount.

At 16 a child can take over as the registered contact of a Junior ISA, but gov.uk says money cannot be taken out until 18, apart from the terminal illness and death cases. At 18 the account turns into an adult ISA automatically.

According to gov.uk, an ISA you already hold can stay open if you become non-UK resident and keeps its UK tax relief, but you cannot pay into it unless you are a Crown employee overseas or their spouse or civil partner.

The 25% Lifetime ISA charge applies to the total amount in the ISA, including the bonus, when the whole balance is withdrawn, so an early withdrawal can pay out less than was paid in. The examples below show the arithmetic.

A transfer moves an ISA to another provider using a transfer form, while withdrawing the money yourself means you cannot reinvest that part of your tax-free allowance. Lifetime and Junior ISAs have extra restrictions, and a Lifetime ISA moved to another ISA type before the penalty-free age can attract the withdrawal charge.

HMRC's newsletter says the annual limits stay put until April 2031. A lower cash ISA limit from April 2027 is made in law but not yet in force, and a First Time Buyer ISA is only a proposal.

A parent or guardian with parental responsibility can open a Junior ISA for a UK-resident child under 16, a child aged 16 or over can open their own, and anyone can pay in up to the yearly limit. The money belongs to the child. This guide sets out who can do what.

The four adult ISA types (Cash, Stocks and Shares, Lifetime, Innovative Finance) and the Junior ISA: what each can hold and how withdrawals work.

How an ISA calculator turns balance, contributions, rate and time into a projected return, how to read nominal and real figures, and what it leaves out.