The main advantage of an ISA over a normal bank account is the tax exemption. The money you put into an ISA is from your after-tax income but when you withdraw money you do not pay any income or capital gains tax. The interest generated is also tax-free. Today, there have been six types of ISA: Cash, Lifetime, Stocks & Shares, Innovative Finance, Help-To-Buy and Junior. The first four are available to adults to make use of today, with help-to-buy no longer being available and the Junior ISA for under eighteens only. It may be difficult to understand which ISA is best for you, this blog post will explain all of the different types so that you can make an informed decision.
Covid-19 has taught us how sudden and big a financial thunderstorm can come. Investment platform AJ Bell recently reported that 20 % of UK workers did not have a rainy-day fund and 71 % of workers held savings of up to 3 months salary.