Saving and investing with ISAs

Individual savings accounts allowance (ISA limit 2011-2012)

The annual individual savings account limit for most people is still £10,680 with the deadline to use this year's ISA allowance being 5th April 2012. 

Each year the ISA Allowance is set by the government and any changes in ISA limits will be announced by the chancellor in his annual budget speech. New ISA limits have recently been introduced which increase the ISA allowance for everyone to £10680 from April 2012. Please see table below for details.

An ISA can contain up to 2 different types of investment: - cash (including national savings plans) and stocks and shares.

ISA investment growth does not normally incur a tax liability which means ISAs tend to be a very popular & tax efficient method of saving. ISAs are flexible because they allow both lump sum investments as well as regular fixed contributions.

Both Cash ISAs and Stocks & Shares ISAs are open to anyone over 18, resident and ordinarily resident in the UK. Anyone over 16 can have a cash ISA.

Mini & Maxi ISA allowances, the new ISA rules

In order to simplify the ISA Structure, the distinction between Mini & Maxi ISA's has disappeared. Nowadays there's only a distinction between a Cash ISA and  a Stocks & Shares ISA.

ISA allowances & limits

The limit for a cash ISA is still £5340 for most people and the limit for a Stocks & Shares ISA is £10680 (£5340 if also invested into a cash ISA). The overall combined ISA allowance is £10680.
 

Transfer between ISAs

It is now possible to transfer money held in a Cash ISA to Stocks & Shares ISAs without affecting your annual allowance or the tax status of the investment.

From April 2008 PEPs ceased to exist and any remaining PEP investments will have been transferred to Stocks & Shares ISAs. The investments within the PEP will stay the same in the ISA, and will retain their tax status.