ISA Savings & Investments
What is an ISA? An Individual Savings Account (ISA) is a government-backed, tax-efficient account that allows you to save or invest a certain amount, every tax year, without paying Income Tax or Capital Gains Tax (CGT). For the 2025/26 and 2026/27 tax years, the annual ISA allowance remains at £20,000.
Unlike a pension, your money is accessible at any time, making ISAs one of the most flexible, tax-efficient tools available.
There are several types of ISA, each suited to different circumstances:
- Cash ISA – your cash earns tax-free interest in a savings account.
- Stocks & Shares ISA – your cash is invested in the markets (across stocks, funds or bonds), without paying CGT or income tax on returns, giving your money the potential to grow over time.
- Lifetime ISA (LISA) – available for first-time buyers or retirement, with a 25% government bonds on contributions up to £4,000 per year. You must be under the age of 40 to open a Lifetime ISA.
- Innovative Finance ISA (IFISA) – your allowance is placed into peer-to-peer lending and crowdfunding arrangements, which carry a higher level of risk.
- Junior ISA (JISA) – a tax-free account for children under 18, with a £9,000 annual allowance limit.
Note: From April 2027, the way you use ISAs is subject to change. You will still be granted the £20,000 annual ISA allowance, but you’ll be able to put £12,000 maximum in a cash ISA each tax year, with the remaining £8,000 able to go in a stocks & shares ISA.
Why do we use ISAs? Over your lifetime, tax drag (which refers to the erosion of investment returns through tax) can significantly reduce the value of your wealth. ISAs remove this drag entirely. Consistent, disciplined use of your annual allowance can build a substantial, tax-free savings pot that complements your pension and supports your longer-term lifestyle goals.
With capital gains tax becoming increasingly punitive through lower allowances and higher rates, ISAs offer a straightforward way to keep assets accessible while minimising unnecessary taxation.
What do we need from the client? To recommend the most appropriate ISA saving strategy, we need to understand your current financial position, your investment objectives, your risk profile, and your broader tax position. This allows us to identify which type of ISA, or combination of ISAs, is most appropriate for your circumstances.
What will we produce? ISA financial planning sits within your overall strategy and long-term plan. We will make clear recommendations as part of a considered, tailored strategy that complements your financial goals, not as a standalone product sale.
What tools do we use?
- Dynamic planner – this allows us to assess your risk profile, map your existing portfolio(s), and identify the most suitable platforms and custodians to house your assets and ISA investments. It also helps us run psychometric tests with you, to establish your risk preferences, capacity, and ethical investment choices.
Note: Tax treatment depends on your individual circumstances and may be subject to change. Investments can fall as well as rise in value, and you may not get back the full amount invested. Past performance is not a reliable indicator of future results.