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  • What are the different types of ISA?

    Decide how to make the most of your ISA allowance by learning more about the different types of ISAs available.

    Last Updated: 6 April 2024

    ISAs were introduced back in 1999 as a way for savers and investors to shelter their money from tax.

    At the time, you could add £7,000 to ISAs each tax year. The current tax year's (2024/2025) ISA allowance has more than doubled to £20,000.

    But it's not just your ISA allowance that's increased over the years – your options have too. There are now more types of ISA available, each with different features and benefits.

    We've summarised some of the main differences to help you decide whether an ISA is right for you.

    This isn't personal advice – if you're not sure if ISAs are right for you, you should ask for financial advice. Remember tax rules can change, and the benefits highlighted will depend on individual circumstances. Unlike the security offered by cash, investments fall as well as rise in value, so you could get back less than you put in. Inflation can reduce the future spending power of money.

    How do ISAs work?

    ISAs are a great option to help shelter your money from UK tax. Once money is paid into an ISA, it's then protected from both UK income and capital gains tax.

    You can spread your ISA allowance across any combination of Stocks and Shares, Innovative Finance, or Cash ISAs. However, you are still only able to pay into one Lifetime ISA each tax year (up to £4,000 per year).

    For example, if you wanted to divide your ISA allowance between cash and investments, you could put £5,000 in Cash ISAs and then the remainder (£15,000) in Stocks and Shares ISAs.

    It's also possible to pay up to £9,000 into a Junior ISA for a child.

    The tax year ends on 5 April, so if you want to use your ISA allowance, you'll need to act by then. Figures shown are for the 2024/2025 tax year.

    Compare ISA accounts

    Eligibility

    • UK resident
    • Aged 18+

    Minimum to open

    For an HL Stocks and Shares ISA

    £100

    or

    £25 per month

    Maximum contributions

    £20,000
    per tax year

    Could be considered by

    People who want to invest their money tax-efficiently over the long term (5 years or more) and happy with the risks of investing.

    Cash ISA

    An ISA for cash savers.

    Learn more about Cash ISAs

    Eligibility

    • UK resident
    • Aged 18+

    Minimum to open

    Dependent on provider

    Maximum contributions

    £20,000
    per tax year

    Could be considered by

      People who want to increase their cash savings or have an emergency buffer.

    Lifetime ISA

    An ISA for first-time buyers or those saving for later life.

    Get an extra 25% from the government, up to £1,000 per year.

    Learn more about Lifetime ISAs

    Eligibility

    • UK resident
    • Open aged 18-39
    • Pay in aged 18-49

    Minimum to open

    For an HL Lifetime ISA

    £100

    or

    £25 per month

    Maximum contributions

    £4,000
    per tax year until age 50 (contributions will count towards your £20,000 allowance but the government bonus does not)

    Could be considered by

    People under 40 saving for their first home. Or for withdrawals after age 60.

    Withdrawals not for an eligible first home purchase or later life will usually be subject to a 25% government charge, so you could get back less than you put in.

    Junior Stocks and Shares ISA

    An investment ISA for children.

    Learn more about Junior ISAs

    Watch our video on Junior ISAs

    Eligibility

    • Children under 18
    • Parents or guardians can open a Junior ISA for their child, if the child is a UK resident, and anyone can add money to it
    • Children born before 3 January 2011 need to have transferred their Child Trust Fund to a Junior ISA first to open an account

    Minimum to open

    For an HL Junior ISA

    £100

    or

    £25 per month

    Maximum contributions

    £9,000

    per tax year

    Could be considered by

    People who want to invest tax-efficiently for a child (over 5 years or more) and are happy with the additional risks of investing.

    Junior Cash ISAs are also available.

    Money in a Junior ISA can't normally be taken out until the child turns 18, when the child takes full control of the account

    Innovative Finance ISA

    An ISA for access to peer-to-peer lending.

    Eligibility

    • UK resident
    • Aged 18+

    Minimum to open

    Dependent on provider

    Maximum contributions

    £20,000

    per tax year

    Could be considered by

    People who want a higher rate of interest than a cash ISA and are willing to accept the extra risks. You should make sure the investments are regulated by the FCA.

    WHAT TO THINK ABOUT WHEN CHOOSING AN INVESTMENT ACCOUNT

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