What is an ISA?
An Individual Savings Account (ISA) is a class of retail investment arrangement which is available to
residents of the UK. Payments into the account are made from after tax income, then the account is
exempt from income tax and capital gains tax on investment returns, and no tax is payable on the
money withdrawn from the scheme.
Cash and a wide range of investments can be held within the arrangement, and there is no restriction
on when or how much money can be withdrawn. Each taxpayer has an annual investment limit of
£20,000 as of 2020-2021, which can be split between the 4 main types of ISA. Children under the
age of 18 can hold a junior ISA which will have different annual limits.


Types of ISA
The 4 main types of ISA are as follows;
Cash ISA- A good way to earn interest on your savings.
Stocks and Shares ISA- An account where you can invest in stocks and shares, and not have to
pay income tax or capital gains up to a certain point, this is a higher risk form of ISA and should be
thoroughly researched before opened.
Innovative Finance ISA- This ISA allows you to make peer-to-peer lending investments within a
tax free wrapper.

Lifetime ISA-You can use a Lifetime ISA to buy your first home or save for later life. You must be
18 or over but under 40 to open a Lifetime ISA. You can put in up to £4,000 each year, until you’re
50. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.
This £4,000 counts towards your £20,000 a year ISA limit.

**DISCLAIMER. We here at Borpays want to help you by giving you as much information as we can, but we are not financial advisors. We will never give you financial advice, and we strongly recommend you doing your own research before making any financial decisions. We recommend speaking to your bank or an independent financial advisor before opening an ISA in order to make sure you get the right one for you. We accept no responsibility for any financial losses you incur through investing.