An Individual Savings Account, or ISA as it’s better known, is a savings account that is protected from taxation. Each year the Government provides a limit on the amount you can save, spread across several different types of ISA. This annual ISA allowance changes from time to time; but for the current tax year, the limit stands at £20,000.

The advantage of an ISA is that you don’t pay any tax on interest earned, or on any capital gains from the investments held within your ISAs, regardless of how long the money’s been in there – so if you’ve not yet set one up, it’s certainly worth taking advantage of.


There are two main types of ISA: Cash ISAs and Stocks & Shares ISAs, and you can open and add to both in the same tax year.

Cash ISAs are just like a normal savings account: put your money in and you’ll earn interest, tax-free. You can take your money out at any time and it’s not at risk.

Stocks & Shares ISAs – as the name would suggest – are for investing, and you can cash in your investments at any time without worrying about having to pay Capital Gains Tax if the portfolio has done well. You can use this account to invest in stocks, shares, funds, corporate or government bonds, gilts or even commercial property. You won’t be able to transfer any existing stocks and shares you hold elsewhere into your ISA, unless it’s through an Employee Share Scheme and your ISA provider agrees.

You can open more than one Stocks & Shares ISA and it doesn’t need to be with the same provider, but you can’t open more than one Stocks & Shares ISA in any given tax year. Whilst investing through this type of ISA could be a good way to grow your savings, bear in mind as with any investment it isn’t entirely risk-free, as it’s subject to stock market fluctuations.


Stocks & Shares ISAs are great for growing your nest egg and providing for the future, taking advantage of the tax breaks on offer. However, if you’re saving for something more specific or long-term, you might find another ISA is better geared towards your goals:

The Lifetime ISA is a government-boosted account which can be opened by UK residents over 18 but under 40, with an annual limit of £4,000 (which counts towards your overall annual limit).

This can be in the form of cash, stocks and shares, or any combination of. The government will add 25% on top of what you save annually (up to £1,000) but after you turn 50, you won’t be able to pay more in, although you’ll still earn on the amount saved. You can only withdraw your money at specific points: if you’re buying your first home, after your 60th birthday or if you’re terminally unwell. Pre-emptive withdrawals come with a hefty fee – 25% – essentially taking back the Government bonus.

Junior ISAs are cash or stocks and shares accounts which you can open for your children, provided they’re both under 18 and UK residents, to save for their futures. You can manage these funds and choose to hand over the power when they turn 16 – if you want to. When they reach the age of 18, it converts to a normal ISA, and they have full access to it.

Whichever ISA you decide to choose they are a excellent, tax efficient way to save and invest for your future and your retirement. You can invest in a Stocks & Shares ISA, as well as a Junior ISA with Silo, and even transfer in existing ones you might have elsewhere. Find out more in-app, or email us at [email protected].

Please note this article is for information purposes only and is not personal advice. As is the nature of investing, your capital is at risk.