ISAs Explained.

WHAT IS AN ISA?

An ISA (Individual Savings Account) is a tax wrapper into which you can invest cash or shares.  ISAs offer a great way to save for the future, tax-free.  They can be very flexible and are suitable for medium to long-term investments.

When you invest in an ISA, you don’t have to pay income tax or capital gains tax on the returns you receive, no matter how much the investment grows in the future or how much you take out.

There are two types of ISA, a cash ISA and a stocks and shares ISA.

Cash ISAs are simply savings accounts where the interest isn’t taxed.

A stocks and shares ISA lets you save money in a range of investments, such as shares, unit trusts, open ended investment companies (OEICs) and investment trusts.  In a stocks and shares ISA, your investment can go down as well as up.

Each year, you can choose how you’d like to invest your ISA allowance.  You can invest in either a cash ISA, stocks and shares ISA or a combination of both.  There are rules around where and how much you can invest.

The value of tax savings and eligibility to invest in an ISA will depend on individual circumstances and all tax rules may change in the future.  Read more about ISA rules.

Your employer may offer the WorkSave ISA (a stocks and shares ISA).  Please speak to your employer to see if this product is available to you.