Frequently Asked Questions – Individual Savings Account (ISA)
We thought it would be useful for you, to catalogue the type of questions we get from our clients. Please note this does not constitute advice as your individual circumstances would need to be analysed to ensure a course of action is suitable for you.
Answering your Questions about ISAs
1. What is an ISA?
An Individual Savings Account (ISA) lets you save or invest money without paying tax on what you earn. Any interest, dividends, or gains you make stay in your pocket, the taxman can’t touch them. It’s the government’s way of helping you keep more of your money.
2. How much can I save in an ISA each year?
You can currently put up to £20,000 into ISAs each tax year (6 April to 5 April). This is your personal allowance use as much or as little as you need.
3. Do I pay tax on ISA interest or gains?
No. Everything you earn inside your ISA is yours to keep, tax-free. No income tax, no capital gains tax. This protection continues year after year.
4. What types of ISAs are there?
You can choose from:
∙ Cash ISAs – earn interest like a savings account
∙ Stocks & Shares ISAs – invest in markets for potential growth
∙ Innovative Finance ISAs – peer-to-peer lending
∙ Lifetime ISAs – government bonus for first homes or retirement
∙ Junior ISAs – for your children under 18
5. Can I have more than one ISA?
Yes, you can hold multiple ISAs from different years. However, you can only pay into one of each type per tax year. Your total contributions across all types can’t exceed £20,000 annually.
ISA Contributions, ISA Transfers & ISA Rules
6. Does transferring an ISA count as opening a new one?
No. Transferring preserves your existing ISA in its tax free box, without using your current year’s allowance. Do not withdraw and redeposit, this will lose the tax free status. Your tax benefits continue uninterrupted and you keep your contribution history.
7. Can I transfer my ISA to another provider?
Absolutely. Contact your new provider and they’ll handle everything usually within 15-30 working days. If they don’t help you may need an adviser to do this for you. Your money stays protected throughout and you won’t lose any tax benefits.
8. Can I move funds between different types of ISAs?
Yes, you can transfer between ISA types (Cash to Stocks & Shares, or vice versa). Always use the official transfer process don’t withdraw and redeposit, as you’ll lose your tax protection.
Access & Eligibility of ISAs
9. Can I withdraw money from my ISA at any time?
Most ISAs offer flexible access, to withdraw whenever you need. Some fixed-rate Cash ISAs may restrict withdrawals during the term. Lifetime ISAs charge a penalty (25%) unless you’re buying your first home or over 60.
10. Are there age limits for opening an ISA?
∙ Cash ISA and Stocks & Shares ISA: 18+
∙ Lifetime ISA: 18-39 (must open before 40)
∙ Junior ISA: under 18
11. What happens to my ISA if I move abroad?
You can keep your existing ISAs and they remain tax-free. However, you can’t open new ISAs or add money to existing ones unless you’re a UK resident for tax purposes.
Other Common ISA Concerns
12. Are ISAs subject to inheritance tax?
ISAs may be included in your estate for inheritance tax purposes. However, if you’re married or in a civil partnership, your spouse can inherit your ISA value as an additional allowance—preserving the tax benefits.
13. Can I have a joint ISA?
No, ISAs are individual accounts only. However, you and your partner can each open your own ISAs, giving you combined protection of up to £40,000 per year.
14. Is it worth getting an ISA compared to regular savings?
For most people, yes. ISAs protect all your earnings from tax, while regular savings accounts may trigger tax bills once you exceed your Personal Savings Allowance (£1,000 for basic-rate taxpayers). The more you earn, the more valuable this protection becomes.
15. What’s the difference between Cash ISAs and Stocks & Shares ISAs?
Cash ISAs protect your money with guaranteed interest, safe but typically lower returns. Stocks & Shares ISAs invest your money for potential growth, higher potential returns but your money can go down as well as up. Your choice depends on when you need the money and how comfortable you are with risk.
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Wellington Wealth is a Glasgow‑based wealth management firm offering independent financial planning, retirement advice and investment management to professionals, business owners and retirees across Scotland and beyond.
BE AWARE
This information is for guidance only and does not constitute regulated financial advice. To ensure you have personalised advice for your particular set of circumstances, you must make an appointment and speak to one of our professional advisers. Please note these services are chargeable. The facts in this article were correct at time of writing, but you may be reading it in the future. Always check rates and allowances before taking action or speak to a qualified financial planner. All investments carry an element of risk, they can fall as well as rise and you may not get back what you pay in. Errors & omissions excepted.
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