What's an ISA?

An Individual Savings Account (ISA) works like a regular savings or investment account, but with one big advantage: any interest earned is tax efficient.

 

In this guide

ISAs, limits, types and tax, each important terms - but we're here to guide you through it. In this guide, you'll discover:

  • What is the ISA subscription limit?
  • ISAs and tax
  • Why is tax year end important?

ISAs - here's the low down

An ISA helps you to save and invest tax efficiently. There are four different kinds of ISA: cash ISAs, stocks and shares ISAs, lifetime ISAs and innovative finance ISAs.

You can subscribe to the four types of ISA in lots of combinations, as long as you do not exceed the annual ISA subscription limit, currently £20,000.

To apply for an ISA, you must be at least 18 and a resident in the UK for tax purposes.

What is the ISA subscription limit?

Each tax year (06 April to 05 April of the following year) the Government sets a subscription limit on the amount you can save in an ISA. Currently this subscription limit is £20,000 in total. You can split this across the different types of ISAs. The different types of ISAs have their own limits.

What are the limits for the different types of ISAs?

  • Cash ISA up to £20,000 (You can only pay into one cash ISA with us in any tax year up to the ISA subscription limit).
  • Stocks and shares ISA up to £20,000
  • Innovative finance ISA up to £20,000
  • Lifetime ISA up to £4,000

We offer Stocks and Shares and Cash ISAs. You can hold multiple cash ISAs with us, but you can only contribute to one each tax year.
 

Pie chart showing how you can split your ISA subscription limit across different types of ISA

Our ISAs

ISAs and tax

There are several types of tax that can impact the interest you earn on savings or the returns you make from investing. ISAs can help you save or invest tax efficiently.

If you’d like to find out more information, we have these pages on tax for your savings and tax for your investments. 

Tax on savings interest

Tax on investment returns

Why is tax year end important?

The tax year ends on 05 April. After this date, many of your annual tax allowances will reset. This includes the amount you can contribute to an Individual Savings Account (ISA). Also, how much you could earn in interest, capital gains or dividends. 

An unused ISA allowance does not roll over to the next tax year. If you don’t use it by 05 April, you lose it for that tax year. Any funds added after then count towards the new tax year.

Cash ISAs

Pick between variable or fixed interest rate cash ISAs, where your money grows in a tax-efficient way as any interest you earn won’t count towards your Personal Savings Allowance. You could incur a charge if you take your cash out before the end of the term.

Choose to have easy access to your money and withdraw free of charge. The rate you receive on this account will be variable.

You can choose to lock your money away. This may help you get a higher fixed interest rate. However, you might face charges for early withdrawal or closure before the end of the term.

Keep in mind

  • you can only put money into one cash ISA with us in a tax year. You can also pay into any other ISA that you may have in each tax year. As long as, you don’t exceed the annual ISA subscription limit across all your ISAs
  • you may lose money if you take money out or close a Lloyds fixed-rate cash ISA before the end of the term
  • you can make unlimited withdrawals from your Help to Buy: ISA but you can't claim the Government bonus on any money you withdraw.
Cash ISAs

Stocks and Shares ISAs

A stocks and shares ISA is an account that lets you hold various investments. All profits are free from Capital Gains Tax and Income Tax in the UK.

You may want to build your own portfolio using a share dealing ISA, choosing from our wide offering of investments.

If you're new to investing, you can easily invest in our three ready-made funds. Use our Investment ISA for a hassle-free experience.

Stocks and shares ISA: You may want to build your own portfolio using a share dealing ISA, choosing from our wide offering of stocks, shares, Exchange Traded Funds (ETFs), funds, bonds and gilts.

Keep in mind

  • you can invest in more than one stocks and shares ISA. This includes stocks and shares ISAs held outside of Lloyds
  • you can also invest in an investment ISA and a stocks and shares ISA
  • the value of an investment can go down or up. You might receive less than you invested. Charges apply.
Stocks and shares ISAs

Tax treatment depends on individual circumstances and may change in the future. If you're unsure about investing, seek independent advice. There will usually be a charge for this advice.

Let’s look at the details

  • You need to be 18 or older to apply for a cash ISA or a stocks and shares ISA. In all cases, you must be a UK resident for tax purposes. Crown employees living abroad (such as diplomats and members of the armed forces) can also apply.

  • At the moment, your annual ISA subscription limit is £20,000 per tax year. If you accidentally exceed this limit across all your ISAs in one tax year, you need to take action. If product terms allow, you can take the over-subscribed amount out of an ISA account. Otherwise, discuss this with your ISA provider(s). They’ll work to fix the issue with HMRC for you.

  • Yes. You can transfer both your cash ISA and your stocks and shares ISA to another provider. There may be a cost involved but this varies from one provider to another. We do not charge for transfers.

    Transfer cash ISA

    Transfer stocks and shares ISA

  • Yes but only for some of our ISA accounts. In a flexible cash ISA, you can replace funds, but you must do it in the same tax year in which you withdrew the money. You cannot currently withdraw and replace with fixed rate cash ISAs without closing the account fully and you will be charged. You can also only add funds within the first 30 days.

    With a stocks and shares ISA, things work differently. Any money you add counts against your remaining ISA subscription limit, even if you withdrew the same amount earlier in the tax year. Our investment ISA offers flexibility. You can withdraw and add funds, but remember to replace them in the tax year you took them out.

  • You can open a variable-rate cash ISA with just £1. You can also start a stocks and shares ISA with us without any initial cash. You can fund it later when you're ready. For our investment ISA, you need either a £500 lump sum or a £50 monthly direct debit to get started.

  • A variable rate ISA offers you a rate of interest that can go up and down, but with easy access to your money, which you can withdraw free of charge.

    With a fixed rate ISA, you know in advance what your interest rate will be for a defined term. This may help you get a higher fixed interest rate. However, you might face charges for early withdrawal or closure before the end of the term.

  • It’s up to you. Variable rate cash ISAs offer savers instant access to their money. Fixed-rate ISAs usually offer savers a higher interest rate. You can receive this rate if you lock your savings away for a fixed amount of time. However, you'll face withdrawal charges.

    Stocks and shares ISAs, and investment ISAs, allow you to have access to your money at any time. Investing may be more appropriate if you’re looking to invest for the medium-long term, which would be 5 to 10 years.

  • There are several reasons why you might not save and invest in an ISA. If you've already used your £20,000 ISA subscription limit, you can't add more money to it. You'll need to put any extra money into a general savings or investment account.

    You may already be investing tax efficiently in another way, such as putting money into a pension. Or perhaps you aren’t able to open an ISA - you need to be 18 or over and a UK resident for tax purposes.

Protecting your money

Protecting your money

The Financial Services Compensation Scheme (FSCS) protects up to £120,000 of the eligible money you hold with us.

More about the FSCS

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ISA allowance page

Find out more about the ISA allowance and how you save money each year.

Your ISA allowance

Savings help and support

Get more support on a range of savings topics.

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Important legal information

The Lloyds Bank Direct Investments Service is operated by Halifax Share Dealing Limited. Registered Office: Trinity Road, Halifax, West Yorkshire, HX1 2RG. Registered in England and Wales no. 3195646. Halifax Share Dealing Limited is authorised and regulated by the Financial Conduct Authority under registration number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.

Lloyds and Lloyds Bank are trading names of Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.