With the ISA deadline coming up here are some answers to the most frequently asked questions:
What is my ISA allowance?
Every UK resident over the age of 16 has the same Cash ISA allowance. The allowance for the tax year 2019/2020 is £20,000. The only exception to this is young adults who are aged 16 and 17, who have an additional Junior ISA limit of £4,368.
You can save up to £20,000, tax-free, into any combination of permitted ISAs. For example, you may choose to spread your savings across a Cash ISA or stocks and shares.
Any interest you earn on your savings doesn’t count towards your personal savings allowance.
How does the ISA deadline work?
UK residents get an ISA allowance for each tax year. This dictates exactly how much you can save in a tax-free cash or investment ISA.
At the end of each tax year, the ISA allowance is reset. This is why the end of each tax year is known as the ISA deadline. In the UK, the tax year runs from 6th April to midnight on 5th April.
The ISA deadline is at midnight on 5th April. Savers have until this time to add to their tax-free savings accounts. If savers miss this deadline, they lose any unused allowance for that tax year.
Many savers feel pressured in the run up to the ISA deadline, as they’re keen to make the most of any unused allowance.
However, if you don’t think you’re going to use all of your allowance before the ISA deadline, you don’t need to worry. This doesn’t affect how much allowance you’re entitled to moving forward, it just means you haven’t taken advantage of all of your allowance for that particular tax year.
What ISAs are available?
This is where we can help. There are many different ISAs out there and we can help you find the best one that suits not only your circumstances but goals. Please get in touch to find out more.