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Individual Savings Accounts are an annual tax-free savings allowance enjoyed by every UK resident over 18 (for a Lexo ISA). The ISA allowance is £20,000 per tax year.

The main types of ISA today are cash ISAs, stocks and shares (aka investment) ISAs, JISA (Junior ISAs) and for those aged 18 to 39 the Lifetime ISA (LISA).


Cash ISAs can be opened by anyone from the age of 16 and allow you to save without any income tax payable on the interest. There is no fee to open one. Cash ISAs have become less attractive since interest rates have been so low for so long, and since the Personal Savings Allowance was introduced.

Stocks and shares ISAs, also referred to as investment ISAs, available from the age of 18, invest your ISA funds into shares and/or bonds, either directly or via a collective fund. Lexo offers investors access to their portfolios via investment ISAs.

Junior ISAs replaced the old Child Trust Funds and allows parents or careers of children under 18 born on or after 3rd January 2011 to open a Junior ISA. Child Trust Funds can now be transferred to a JISA.

Lifetime ISAs (LISA)  will allow investors aged 18 to 39 to save up to £4,000 a year and get a 25 per cent top-up from the government. That means £1 for every £4, up to a maximum of £1,000.

The money can be withdrawn at any time to buy a house worth up to £450,000, or you can leave it in until you are 60. Any money taken out earlier for reasons other than a house purchase or terminal illness will face charges of 25 per cent.

If you are interested in a Lifetime ISA please let us know.


Here are some of the most frequently asked questions about ISAs.

Stocks and shares ISAs are open to anyone from age 18 who is a UK resident. Cash ISAs are available from the age of 16.

Because of the significant tax advantages, contributions into an ISA are restricted, the allowance is £20,000.

If you do not use your allowance, you cannot carry it forward to future years.

All income and capital from an ISA is tax-free: whatever money you take out of an ISA is without tax, no matter how large it grows. In addition, no tax is payable on dividends from shares within an ISA.

The money within your ISA is not subject to tax, and any gains are made tax-free i.e. no capital gains tax is applied on any growth and no income tax is applied to any interest or dividends.

This is a significant benefit of an ISA: the fund can successfully grow in a tax-free environment meaning your capital would grow quicker in an ISA, all othering things being equal.

Contributions made into an ISA do not attract any tax relief, so what you put in is what is invested (less any fees).

This is a drawback of an ISA: the full value of an ISA is within your estate when you die and therefore is potentially subject to inheritance tax, which is 40%.

On death, although the widow, widower or bereaved civil partner cannot directly inherit the ISA, they can open an inheritance ISA since December 3, 2014. It’s essentially an extra ISA allowance on top of the annual amount.

The allowance will be the same value as your partner’s ISA value at the date of their death and you put the investment into an ISA in your name, keeping all gains, income and withdrawals tax-free. You have three years after their death to do this, or 180 days after the administration of the estate is complete, if later.

Lexo ISAs

We offer stocks and shares investment ISAs to investors, with an easy-to-manage and secure online platform that gives you the information you need in just a few clicks.