A guide to Individual Savings Accounts (ISAs)

If you keep a close eye on the future, you’re the sort of careful person who appreciates the value of saving. Having an Individual Savings Account (ISA) is an important part of many people’s savings strategy.

Each tax year, the Government sets an annual ISA subscription limit, part of which can be saved in a cash ISA and the remainder in a stocks and shares ISA. Alternatively, you can invest the whole amount in a stocks and shares ISA.

In the current tax year, the overall annual ISA subscription limit depends on how old you will be on 6 April 2010:
• For anyone who will be under 50 years of age on 6 April 2010, it’s £7,200
• For anyone who will have reached 50 years of age before 6 April 2010, it’s £10,200.

The following table explains your options for investing in a cash or a stocks and shares ISA.  

Open and run one cash ISA each tax year Open and run one stocks and shares ISA each tax year

If you’ll be under 50 on 6 April 2010, you’ll be able to save up to £3,600 of your £7,200 total annual ISA subscription limit in a cash ISA during the current tax year.

If you’ll be 50 or over on 6 April 2010, you’ll be able to save up to £5,100 of your £10,200 total annual ISA subscription limit in a cash ISA during the current tax year.To be invested with a single provider only.

  • If you’ll be under 50 on 6 April 2010, provided your total ISA investment does not exceed £7,200 in one tax year, you can invest:
     
    - Up to £7,200 in a stocks and shares ISA or
    - Up to £3,600 in a cash ISA and the
      remainder in a stocks and shares ISA

    If you’ll be 50 or over on 6 April 2010, provided your total ISA investment does not exceed £10,200 in one tax year, you can invest:
     
    - Up to £10,200 in a stocks and shares
      ISA
    or
    - Up to £5,100 in a cash ISA and the
      remainder in a stocks and shares ISA

    You can open and run a cash ISA and a stocks and shares ISA in the same tax year with either the same or different ISA providers.

    Money held in a cash ISA can be transferred into a stocks and shares ISA (but not the other way round).

 

Making the most of your tax-free allowance

To get the most benefit from your ISA allowance you should pay in the maximum amount on the first working day of the new tax year and then not make any withdrawals in that year.

C&G Savings offers you a choice of cash ISAs: one that you can operate by post and one that’s branch based. You can also save in our Fixed-Rate ISA, which gives you the security of knowing how much interest your savings will earn for a set period. 

For the interest paid on your C&G Cash ISA or C&G Fixed-Rate ISA to be exempt from income tax, your account must be operated within the rules laid down by the Government, all of which are shown in the C&G Cash ISA and C&G Fixed-Rate ISA terms and conditions. Please note that the favourable tax treatment may not be maintained if any of the rules are broken, a change to your circumstances means that you no longer qualify for an ISA, or the Government alters the rules of the ISA scheme or withdraws it altogether.

 

Next steps:

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