Individual Savings Accounts (ISAs) were introduced by the UK Government in April 1999 as a way to encourage UK tax payers to save by providing a tax incentive.
Normally when you save money in a bank, building society, OEIC or unit trust, the taxman takes 20% of your returns (more if you are a higher rate taxpayer).
If you invest in a Stocks & Shares ISA, however, you can invest up to £10,200 tax-free in the current tax year, or up to £5,100 in a Cash ISA with the remainder in a Stocks & Shares ISA either with the same or another provider.
ISA benefits:
- tax-free investment up to a limit of £10,200 for the tax year 2010/11
- lump sum and/or monthy investment available
- a wide choice of funds
