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ISA allowance

Important information - please keep in mind that the value of investments can go down as well as up, so you may get back less than you invest. Tax treatment depends on individual circumstances and all tax rules may change in the future. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser. Withdrawals from a Junior ISA will not be possible until the child reaches 18.

What is the ISA allowance?

The ISA allowance in a nutshell is how much a person can put into their ISA each tax year. The ISA allowance for this year is £20,000. The tax year runs from the 6th of April to the 5th of April the following year. And you have until midnight to invest your money. If you do not use all your ISA allowance in one year, you’re not able to carry this allowance over to the next year so it’s important to make the most of each tax year.

The best way to think of an ISA is as a tax 'wrapper'. Each year, you're entitled to a specific allowance or limit, which is protected by the ISA wrapper. This means you won't be charged tax on the interest or capital gains you earn, offering greater growth potential on your investments.

How much can I put in an ISA?

An Individual Savings Account, or ISA, is a tax-efficient way of saving money. As each type of ISA has a maximum yearly allowance, it's worth knowing what your ISA's limit is - as it will vary depending on whether you hold a Cash ISA, a Stocks and Shares ISA, an Innovative Finance ISA, a Lifetime ISA or Junior ISA. As you'll lose your ISA allowance if you don't use it, take a look at what this could mean to you.

Transcript - How much can I put in an ISA?

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Is the ISA allowance the same for a Junior ISA?

The ISA allowance differs for an ISA and a Junior ISA, the Junior ISA allowance is £9000 a tax year as opposed to £20,000 a tax year. In April 2020 the chancellor Rishi Sunak increased the Junior ISA allowance for Junior ISAs from £4368 to the current amount. Below we have broken down the core differences between an ISA and a Junior ISA.

Stocks and Shares ISA

  • For the 2020/21 tax year the ISA allowance is £20,000
  • You can only invest in one Stocks and Shares ISA each tax year
  • Choose from a wide range of funds, shares, exchange-traded funds (ETFs) or investment trusts
  • If you don’t use all of your ISA allowance before the end of the tax year it is lost

Junior ISA

  • For the 2020/21 tax year the Junior ISA allowance is £9,000
  • You can only have one Stocks and Shares Junior ISA at any one time
  • Choose any combination of funds, shares, exchange-traded funds (ETFs) or investment trusts
  • If you don’t use all of your child’s Junior ISA allowance before the end of the tax year it is lost
  • Withdrawals from a Junior ISA will not be possible until the child reaches age 18.

More ISA allowance Information

Do ISA transfers count towards ISA allowance?
Can you inherit ISA allowance?
Can you split your ISA allowance?

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