FAQ About Individual Savings Accounts

Individual Savings Accounts
11 months ago | alfred

What is ISA allowance?

ISA allowance refers to the maximum amount of money an individual can contribute to their ISA in a tax year while still receiving tax benefits. The ISA allowance is set by the UK government and may change from year to year.

For the 2022/23 tax year, the ISA allowance is £20,000. This means that an individual can contribute up to £20,000 to their ISA(s) during the tax year without having to pay tax on the interest, dividends, or capital gains earned within the account(s).

It's worth noting that the ISA allowance is per individual, not per account, which means that an individual can contribute up to the maximum allowance across multiple ISAs. For example, an individual could invest £10,000 in a Cash ISA and £10,000 in a Stocks and Shares ISA, as long as the total contributions do not exceed £20,000 in the tax year.

If an individual does not use their full ISA allowance in a tax year, they cannot carry forward the unused allowance to the following tax year. The allowance is reset each tax year, which means that any unused allowance is lost.