Complete guide to ISAs

What is an ISA? 

An ISA is an Individual Savings Account and is a great way to save tax-efficiently.

Just like other savings accounts, an ISA is a safe, secure way to save money. The key difference between an ISA and other savings accounts, is that with an ISA you will automatically earn tax-free interest on your savings, for as long as your savings remain within your ISA.

Choosing the cash ISA that is right for you depends on your own individual needs and savings goals - but, at Newcastle Building Society, we’re always here to help you explore your options.

How much can you save in an ISA?

The total amount you can save into a cash ISA is £20,000 each tax year if you are over the age of 18.

You can also save up to £9,000 in a Junior ISA on behalf of a child under the age of 18.

Some types of ISA have specific limits as to how much you can pay in. For example, you can save up to £4,000 in a Lifetime ISA each tax year if you are over the age of 18 and up to the age of 50. You must be under 40 to open a Lifetime ISA. The Lifetime ISA limit of £4,000 counts towards your £20,000 cash ISA limit.

An ISA must be held by an individual and therefore cannot be a joint account with someone else.

You can either save your full allowance in one ISA or you can split your ISA allowance across multiple ISA types, as long as you stay within your ISA allowance limit.

To be eligible to save in an ISA you must be:

• Aged 18 or over,
• A UK resident and,
• Have a National Insurance Number.

What are the benefits of saving in an ISA?

There are a number of benefits to saving in an ISA:

• You will not pay tax on any interest you earn in an ISA, year after year, for as long as the money remains in an ISA.
• Your ISA allowance renews each new tax year – so you can build up your tax-free pot over time.
• For Adult ISAs, you can typically access your ISA funds, depending on the product. However, there are some exceptions to this, such as Junior ISA and Lifetime ISA, please see below for more information.
• The value of your ISAs can be transferred to your spouse or civil partner if you pass away, protecting your tax-free savings.

Can I transfer an ISA?

Yes, you can transfer your existing ISAs between providers as many times as you wish. You can transfer your ISAs from the current and previous tax-years between ISA providers and can consolidate previous tax-years’ ISA subscriptions into one product, where the product allows.

If you wish to transfer an existing ISA held with another provider to a new ISA with Newcastle Building Society, you can do this as part of your application process.

Once we have received your transfer details, we’ll contact your current provider to organise the transfer. If you wish to transfer your ISA between providers, it is important that this is done via an ISA transfer. If you withdraw your money from an ISA to an account that is not an ISA, it will lose its tax-free status.

If you wish to transfer an existing ISA held with Newcastle Building Society to a new ISA held with us, you first need to open a new ISA account. Once you have done this, you can transfer your ISA by logging into your account online.

For more information on transferring an ISA please see our guide to transferring an ISA. Alternatively, you can give us a call on 0345 734 4345* or visit your local branch.

Types of ISAs

There are a number of different ISAs available to help you achieve your savings goals. Whether you’re saving for your first home or saving for a rainy day, there is an option to suit you.