If you’re looking to save in a tax-efficient Individual Savings Account, or ISA, there is a maximum amount that you can invest in any single tax year.
This limit is called your ISA allowance and you mustn't go over it. You can contribute to one ISA of each type in any tax year. It's up to you how you split your annual allowance over the various ISA types. But you'll need to take this into account if you have more than one type of ISA and more than one provider.
The Lifetime ISA has a relatively low payment limit. The Junior ISA does too. Like other ISAs it’s best to check the allowance each tax year, as it can - and does - change.
As it’s entirely feasible to hold one or more ISA, it's a good idea to keep track of how much you pay into each of your ISA accounts. If you invest with one provider, they will keep note of your annual allowance. However, if you have more than one ISA provider, you'll need to track the total yourself.
You should also be aware that if you don’t use your ISA allowance before the end of the tax year - which is midnight on 5 April - you will lose it. It can’t be carried over to the next tax year. That’s why it’s a good idea to invest as much of your full ISA allowance as you can, to maximise the tax benefits that ISAs provide.
So, if you’re looking to invest your money in a tax-efficient way, an ISA is a great place to start. Just remember, you need to check that you're not exceeding your allowance and choose an ISA that's right for you.
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