There are four types of ISAs for adults: cash ISAs, stocks and shares ISAs, lifetime ISAs, and innovative finance ISAs.
The Halifax offers two types of ISAs:
- Cash ISAs are savings accounts where interest paid is tax free. They include the Help to Buy: ISA and Junior Cash ISA for children under 18.
- Stocks and shares ISAs are a way to invest tax efficiently. They include the investment ISA and self-select stocks and shares ISA.
You can save up to £20,000 in ISAs in the current tax year. This allowance can be used in one type of ISA or any combination of the four, as long as you don’t exceed the £20,000 annual allowance. This includes ISAs held outside the Halifax.
Bear in mind that the amount you can pay into your ISA may be limited by the type of ISA you have. For example, the maximum amount you can pay into a Help to Buy: ISA is £200 per month.
The tax year runs from 6th April one year to 5th April the next and you can't carry any unused amount over to a new tax year. The ISA allowance simply resets back to the annual allowance again on 6th April.
What’s the difference between cash ISAs and stocks and shares ISAs?
Tax treatment depends on individual circumstances and may change.