Each person in the UK can put up to £20,000 a year into an Individual Savings Account (ISA), which is a tax-efficient savings vehicle.
If you are between 18 and 40, you can also set up a Lifetime ISA for your retirement savings or your first home. You can put up to £4,000 a year into this type of ISA until you’re 50, but your first payment made into this type of ISA must be made before you are 40 to qualify, and then the Government will add 25% up to a maximum of £1,000. A Lifetime ISA makes up part of your £20,000 allowance for the 2024/25 tax year, so make sure if you invest in another ISA that you don’t breach this overall limit.
Although Capital Gains Tax (CGT) doesn’t apply to ISAs, if you have investments outside of this, then it might be worth considering taking some profit from them to maximise your CGT allowance for this tax year. For the 2024/25 tax year, you can crystallise gains of £3,000 and pay no tax thanks to the CGT annual exemption. You can use this amount before April 5 if you haven’t done this already this tax year.
Stay Informed and Financially Prepared
If you have questions about savings, please do not hesitate to call us.
We will be happy to help you!
