Which ISA could be right for you?
Decide how to make the most of your ISA allowance by learning more about the different types of ISAs available.

Important notes
This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.
5 March 2021
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. Today’s (2020/21) 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,
ISA basics
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 split your ISA allowance between a Stocks and Shares ISA, a Cash ISA, an Innovative Finance ISA and a Lifetime ISA (up to £4,000 per year).
You can split your ISA allowance between a Stocks and Shares ISA, a Cash ISA, an Innovative Finance ISA and a Lifetime ISA (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 a Cash ISA and then the remainder (£15,000) in a Stocks and Shares ISA.
It’s also possible to pay up to £9,000 into a Junior ISA for a child.
This tax year ends on 5 April, so if you want to use your ISA allowance, you should act soon.
ISAs compared
Overview
Eligibility
Minimum to open
Maximum contributions
Could be considered by
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 additional risks of investing.
Eligibility
- UK resident
- Aged 16+
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.
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 (20% if the withdrawal is made between 6 March 2020 and 5 April 2021), so you could get back less than you put in.
Junior Stocks and Shares ISA
An investment ISA for children.
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.
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.
These apply to the 2020/21 and 2021/22 tax years. Tax rules can change, and benefits depend on personal circumstances.
What to think about when choosing an investment account
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Important notes
This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.
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