- Individual Savings Accounts (ISAs) allow adults to save or invest up to £20,000 annually tax-free, helping to shelter money from increasing tax on savings due to frozen thresholds.
- Key ISA types include Cash ISAs for secure savings, and Stocks and Shares ISAs for potentially higher, inflation-beating returns through investments, though capital is at risk.
- The Lifetime ISA (LISA) offers a 25 per cent government bonus on savings up to £4,000 per year for a first home deposit or retirement, available to those aged 18-39.
- Significant changes are planned, including a reduction of the Cash ISA allowance to £12,000 from April 2027 and a potential replacement for the Lifetime ISA from April 2028.
- Savers can spread their £20,000 allowance across different ISA types, transfer existing pots to new products, and some flexible ISAs allow withdrawals and replacements within the tax year.
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