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All the types of ISA available in the UK

In the United Kingdom, ISAs represent a whole new way to save or invest money according to your financial situation and your preferences. They are in fact some particular kinds of Individual Savings Accounts, which have grown in popularity in the last few years.

By opening an ISA, you can in fact save your money or invest it in a wide variety of fields, all without paying any tax. The great popularity of these new savings accounts derives precisely from the fact that every investment made through it will always be tax-protected.

ISAs are available for any UK resident over 16 and can be very convenient for most categories of people: for instance, there’s even a special kind of account that has been specifically designed for parents (or legal guardians) who want to save money for their underage children.

All ISAs come with a restriction on the amount of money that the holder can deposit in one tax year. This value, which is called “annual ISA allowance”, is currently up to £20,000 per year for all ISAs except Junior ISA, the allowance of which is set at £9000 per year, whereas for Lifetime ISA is set at £4000.

What type of ISA should you get?

Let’s go deeper into this matter. In the following paragraphs, we’ll show you all the different kinds of ISAs that can be opened in the UK. And those who are here to find a way to earn money online please read this article – Top 10 Quick Ways to Make Money Online 🙂

How many types of ISAs are there?

Let’s have a closer look at the main types of ISAs available in the UK, but you should always remember that any kind of investment will give you the chance to see your capital go up, but it might also go down as well due to the constant swings of the market.

Cash ISA

The first type is the Cash ISA, which is also the most common one. The difference between a Cash ISA and a regular savings account is that it lets the holder make contributions without paying any tax. Also, you will always need to comply with the annual allowance of £20,000 per year.

 Stock and Shares

The second kind of ISA is Stock and Shares ISA, which on the contrary has been specifically designed for investments. With a Stock and Shares ISA, you’ll be able to invest in stock, shares, bonds, properties and so much more in a tax-efficient way.

Innovative Finance

Innovative Finance ISA is a special kind of account intended to invest money in peer-to-peer lending. The goal is to get interested back, so this kind of investment is also particularly risky because you might end up getting less of what you’ve invested in.

Lifetime ISA

Lifetime ISA is a type of Individual Saving Account available for all UK citizens between 18 and 40 years old and it has been designed to help people save money for life-related purchases, such as their first house or to save money for retirement.

Junior ISA

Lastly, Junior ISA is really another type of savings account available for parents or legal guardians who want to save money for their underage children.

Should you open an ISA?

After understanding what are the main types of ISAs available in the UK, you can choose the one that best suits your financial situation and your needs.

  • Do you just want to start saving money?
  • Do you want to invest your savings?
  • Do you want to set aside some money to guarantee an economically stable future for your children?

These are the questions you need to ask yourself when choosing the right account. Whichever account you’ll decide to choose, always remember that investing is a great way to give money the chance to grow but it also comes with many risks and you might end up getting back less than what you invested.

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