Making the most of your ISA allowance: A guide to tax-efficient saving
What is an ISA?
An ISA is a tax-efficient savings account available to UK residents. The key benefit is that any growth or withdrawals within an ISA are tax-free.
In the 2024/2025 tax year, you can invest up to £20,000 into one or a combination of different ISAs. However, if you do not use your annual allowance before 5 April 2025, it does not roll over and is lost.
Understanding your ISA options
There are two types of ISA that The Penny Group can advise you on, each catering to different financial goals and needs:
1. Stocks & Shares ISA
• For those looking for long-term growth and willing to accept market fluctuations.
• Annual allowance: £20,000
• Accessibility: Withdrawals are possible but best suited for long-term investment (5+ years).
• Risk level: Medium to high (dependant on your risk tolerance) – your investments can fluctuate in value.
2. Junior ISA (JISA)
• For parents or guardians looking to save for their child's future.
• Annual allowance: £9,000 (separate from your £20,000 ISA allowance).
• Accessibility: The child takes control at 16 but cannot withdraw until 18.
• Risk level: Medium to high (dependant on your risk tolerance) – your investments can fluctuate in value.
• Best for: Long-term savings for a child's future expenses, such as university or their first home.
Maximising Your ISA Benefits
Invest for the long term: A Stocks & Shares ISA, ideally should be invested for 5+ years - allowing you to benefit from market growth and compound returns.
Review any existing ISAs: If you already have an ISA, ensure it aligns with your current financial goals and risk appetite.
Use your full allowance: You can contribute up to £20,000 in the tax year to save tax-efficiently.
Diversify: Your ISA is invested in a portfolio of funds, to help manage risk.
Don’t miss the deadline – 5 April 2025
If you do not use your ISA allowance by the end of the tax year, you lose it. Take action now to ensure you’re making the most of your tax-efficient savings opportunities.
If you are looking for tailored financial advice on the best ISA strategy for you, then you can speak to one of our advisers:
Email us at info@thepennygroup.co.uk or give us a call on 0207 061 2345
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 investments and any income from them can fall as well as rise and you may not get back the original amount 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 17/02/2025