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Know Your ISA

Research from Shawbrook Bank has revealed that just 26% of people correctly identified the standard ISA limit as £20,000 for the 2024/25 tax year. Admittedly the prospect of an extra £5,000 UK ISA limit, still under consultation, may have influenced the 8% who thought that the ISA limit was more than £20,000. However, it doesn’t account for the 36% who thought the limit was less than £10,000 or the 7% who didn’t know there was a maximum annual allowance.

 Understanding ISA limits and options can help individuals to optimise their savings mix. For example, some individuals aged between 18 and 40 may benefit from allocating up to £4,000 of their allowance to a Lifetime ISA, whilst for others diverting savings to another form of ISA or to a pension may better meet their long-term goals.

 Meanwhile, research from Calastone has revealed the continuing popularity of ISAs. In the period from 15 February 2024 to the end of the tax year savers invested some £1.93b in equity funds, more than five times the amount invested in the same period in the previous year. And Junior ISAs which have a savings limit of £9,000 are also rising in popularity. Research from easyMoney revealed that the number of Junior ISAs rose by 26.9% in 2021/22 (the most recent year for data) over the previous year.