The ISA allowance is still £20,000 and is available to each family member.

These are particularly important for investors with savings income in excess of the savings allowance (£1,000 for basic rate taxpayers and £500 for higher rate taxpayers).

ISAs are also useful alternative investments for individuals with excess cash whose pension pots are (or will be) affected by the lifetime allowance.

Junior ISAs are also available with an annual investment limit of £9,000. These can be settled by parents without worrying about the parental settlement rules simply because they generate no taxable income.

Lifetime ISAs were introduced in 2017 to help individuals between the ages of 18 and 40 to save either for their first home or towards their retirement. The beauty of “LISA” is that the government adds a 25% tax-free bonus on deposits up to £4,000 per year. No other ISA has that facility.

Everyone under 40 should be advised to take out a Lifetime ISA as it opens-up the possibility of £1,000 a year of ‘free money’. Contributions can then be made until age 50. For those individuals saving towards retirement, the Lifetime ISA can be accessed without penalty at aged 60. Withdrawals are tax-free.



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