Although the main ISA allowance of £20,000 is unchanged for the new 2024/25 tax year, there are some other changes coming in that should increase customer choice. The downside is further complexity, with JISAs (Junior ISAs), LISAs (Lifetime ISAs) and IFISAs (Innovative Finance ISAs) already added to the range of ISA products in recent years.
What is an ISA?
An ISA (Individual Savings Account) is a type of savings or investment product that can provide an investment return or interest payments that are tax-free for the individual. The maximum that can be added to an ISA in a single tax year is restricted, but money can be transferred from one ISA to another.
What is changing for 2024/25?
• Individuals will be able to add money to multiple ISAs in the same tax year. Currently you can only add to a single cash ISA and/or stocks & shares ISA.
• Partial transfers of current tax year ISA subscriptions will be allowed. Currently you can only transfer an ISA that you have added money to in the current tax year by transferring the full amount.
• A loophole allowing individuals aged between 16 and 18 to add up to £20,000 to a cash ISA plus £9,000 to a JISA will be closed.
• A new “UK ISA” has been proposed, which would give an additional £5,000 allowance to be invested in UK companies. It is not clear how this would operate in practice, and no launch date has been set.
Investments can go down as well as up. You may not get back the original capital invested.
This article is for information only and should not be construed as advice or a recommendation. You should always seek independent financial advice prior to taking any action.
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