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Savings & Investments glossary

Individual Savings Account (ISA)

An individual savings account (ISA) is a tax-free savings account designed to encourage people to save for their future.

Money can be withdrawn from the product without a notice period or penalty charges, and interest earned is tax-free.

Normally any interest earned on savings and investments has tax charged on it at the same rate as a person's income.

ISAs allow people to invest up to £7,200 a year tax-free: either in a stocks and shares ISA or a cash ISA.

Up to £3,600 can be saved in a cash ISA, the the remaining allowance up to £7,200 in stocks and shares.


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