Your Top ISA questions answered
We recently ran an ISA surgery inviting you, our readers, to send us your ISA questions and confusions. We got together with Fair Investment, the Tax
Incentivised Savings Association (TISA) and the Buildings Societies Association to help clear up some of your most common queries and
misunderstandings. So without any further ado, here they are...
1: What is an ISA?
An ISA (otherwise known as an Individual Savings Account) is different from a normal savings account because it allows you to save up to a specific
amount each year tax free.
2: How much can I save into an ISA?
The ISA savings limit is currently Â£7,200 for the under-50s and Â£10,200 for the over-50s for the 2009-10 tax year. After 6 April 2010, the ISA
investment allowance is increasing for everyone to Â£10,200.
For the over-50s, up to Â£5,100 of their Â£10,200 can be held in a Cash ISA, with the other half permitted to be invested in stocks and shares.
From April, these limits will be matched for the under-50s. Until then, half of the Â£7,200 limit can be saved in a Cash ISA with one provider. The other
Â£3,600 can be invested in stocks and shares with either the same or another provider.
3: Where can I get an ISA?
You can get an ISA by going to an ISA Manager. ISA Managers can include anyone from banks, building societies, National Savings and Investments,
insurance companies, unit and investment trust companies, financial advisers, fund supermarkets, stockbrokers and even some retail stores and
4: Providing I do not exceed the permitted maximum amount, can I open or invest in more than one ISA per year?
There are limits on the number of ISA accounts you can subscribe to each tax year. You are allowed to hold both one Cash ISA and one Stocks and
Shares ISA, but cannot subscribe to more than one of the same type during any one tax year.
5: Can I dip into my Cash ISA when I need to access money?
This depends. Some accounts will impose a penalty for doing so, and even if they don't, you will lose the tax-fr