Glossary

An ISA, or Individual Savings Account, is a tax-efficient savings and investment account available to residents of the United Kingdom.

ISAs allow individuals to save or invest money without paying tax on the interest, dividends, or capital gains earned within the account. Although tax treatment depends on individual circumstances.  There are different types of ISAs, including Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs, and Lifetime ISAs, each catering to different financial needs and objectives. 🇬🇧

For example, someone may choose to invest in a Stocks and Shares ISA, which allows them to invest in a range of assets like stocks, bonds, and funds while enjoying tax-free returns.

Fun fact: The ISA was introduced in 1999 as a replacement for two earlier tax-free savings schemes, the Personal Equity Plan (PEP) and the Tax-Exempt Special Savings Account (TESSA). The ISA has become an essential part of many UK residents' financial planning due to its tax advantages. 😮