More than half of adults don’t understand ISA rules, research by Opinium has found.
- 1 in 5 knew that the ISA annual allowance is £20,000 for 2017/18
- 24% knew that you can transfer money from previous tax years into a current ISA
- 9% wrongly believed that you can only move money if your total balance is below the annual ISA allowance.
ISAs allow individuals to save money free of income and capital gains tax.
The annual £20,000 allowance covers each type of ISA: cash, stocks and shares, Lifetime, innovative finance and Help to Buy.
ISA rules allow people to split the allowance between different types of ISA. For example, saving £10,000 into a cash ISA and £5,000 into a stocks and shares ISA and £5,000 into an innovative finance ISA. Lifetime ISAs and Help to Buy ISA have their own annual limits – both of which count towards the £20,000 threshold.
|Type of ISA||Annual limit|
|Stocks and shares||£20,000|
|Help to Buy||£200 per month plus an extra £1,000 in the first month|
Some ISAs are flexible which means which means you can take money out and put it back in during the same tax year without it affecting your allowance.
You can transfer savings between providers and into different types of ISA. However, if you want to transfer any money deposited in the current tax year you must transfer it all.
Talk to us about tax and ISAs.