ISAs

An Individual Savings Account (ISA) is one of the simplest and most effective ways to save and invest. Any interest, dividends or growth earned within an ISA are free from income tax and capital gains tax (CGT), which means more of your money stays saved or invested and working for you. For the 2025/26 tax year, you can save or invest up to £20,000 across your ISAs. You can hold one or more ISAs of different types, but the combined total can’t exceed this annual limit.

Choose the right ISA for your goals

There are several types of ISA, each with its own benefits:

Cash ISAs Offer security and easy access, making them a good choice if you want lower risk or may need the funds in the short term.

Stocks and Shares ISAs Let you invest in funds, shares and bonds, giving your savings greater potential for long-term growth, though their value can rise and fall.

Lifetime ISAs (LISAs) Designed to help you buy your first home or save for later life. You can invest up to £4,000 a year (within your £20,000 overall limit) and receive a 25% government bonus.

Junior ISAs Allow parents or grandparents to save up to £9,000 a year for a child under 18, with tax-free growth until they can access the funds at 18.

Flexible ISAs If you want greater flexibility, you can also open a flexible ISA, which lets you withdraw and replace money within the same tax year without losing your allowance.

When to use your allowance

If you don’t use your ISA allowance before 5 April, you lose it because it can’t be carried forward. Making contributions early in the tax year gives your money more time to grow through compounding, so it’s often worth getting started sooner rather than later.

ISAs and capital gains

Recent reductions in the CGT allowance mean ISAs are more valuable than ever. From April 2024, the annual CGT exemption fell to £3,000. Holding investments inside an ISA ensures any future growth is sheltered from CGT altogether.

Work alongside your other savings

ISAs and pensions complement each other well. While pensions are designed for long-term retirement saving, ISAs offer flexibility to access funds at any time, without tax on withdrawals. Together, they can form the backbone of a well-diversified financial plan.

Review and adjust

As your goals and circumstances change, so should your savings strategy. Regular reviews with your adviser can help you choose the right mix of ISAs, balance risk and reward, and keep your money working efficiently for your future.

Get in touch

Email info@thepennygroup.co.uk or call 0207 061 2345 if you have any questions or should you wish to speak to one of our advisers.

An ISA is a medium to long term investment, which aims to increase the value of the money you invest for growth or income or both. The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Approved by The Openwork Partnership on 25/02/2026

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