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You asked: What types of ISA are there?

There are now five different ISA's available for various purposes and have a total annual allowance of £20,000. The most common ISAs are cash or stocks and shares.

  • Cash ISA is a savings account that pays a rate of interest and can be used for short term savings, typically up to five years.
  • Stocks and Shares ISA, usually lets you hold different types of investments – including funds, shares and fixed interest investments such as gilts or bonds - all within the same account. It should be regarded as a long term investment of at least five years.
  • Innovative Finance ISA allows you to lend your money to individuals or businesses. They pay you interest in return and pay your capital back over time. Your money is not protected by the Financial Services Compensation Scheme.
  • Help to Buy ISA is a cash ISA designed for first-time property buyers. The government adds a 25% bonus (up to £3,000) to your savings which is paid when your property purchase is complete.
  • Lifetime ISA (LISA) is a new ISA aimed at adults aged between 18 and 40. It is designed to help people save for their first home and their retirement. You can contribute up to £4,000 in a tax year and the government will add a 25% bonus to your savings.

Junior ISA is for people under 18 and has a separate annual allowance to save on behalf of a loved one, such as your child or grandchild. The money is held in the child’s name and is locked away until they reach age 18. If you contribute to a Junior ISA, the money is considered a gift to the child.

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