ISAs (Individual Savings Accounts) are a great way to save or invest up to £7,200 a year, tax-efficiently. Over 17 million people already have them – and they’re considered a ‘must have’ by many savers looking to make the most of their money and beat the tax man.

They were introduced by the Government in 1999, to encourage us to save and replaced PEPs and TESSAs. An ISA can be made up of savings in cash, or longer term investments like stocks and shares.

Every adult will have an annual ISA investment allowance of £7,200. Up to £3,600 of that allowance can be saved in cash with one provider. The remainder of the £7,200 can be invested in stocks and shares with either the same or another provider.

Example 1:  You save £1,200 in a Cash ISA at the beginning of the tax year. In the same tax year you could save up to another £6,000 in an ISA. This could be up to £2,400 in the same Cash ISA or up to £6,000 in a Stocks and Shares ISA with either the same or another provider, or a combination of both.

Example 2:  You set up a monthly direct debit for £500 into a Stocks and Shares ISA with one provider – over the year as a whole, you pay in £6,000 (12 x £500). In the same tax year you could save up to another £1,200 in an ISA, either the same Stocks and Shares ISA or a Cash ISA with either the same or another provider, or a combination of both.

ISAs are a great savings or investment option - offering something for everyone:

• If you’re looking to save then a cash ISA offers great benefits.
• If you’re looking to invest then a stocks and shares ISA could be for you.