How do I use ISA allowance before tax year ends UK?
Hi there,
I'm pretty new to investing and just learned about ISA allowances. With the tax year ending soon (5th April I think?), I want to make sure I'm not missing out on using my allowance for this year.
I've got about £8k sitting in a regular savings account that I'd like to invest, but I'm a bit confused about the process. Do I need to actually invest the money before April 5th, or just get it into an ISA account? Also not sure whether to go for a Stocks & Shares ISA or just a Cash ISA.
Liz
1 Answer
You're absolutely right to think about this now — the ISA allowance resets on April 6th each year, so you have until April 5th to make use of the current year’s allowance.
ISA allowance for the 2024/25 tax year is £20,000. You can split this across different types of ISAs (e.g., Cash, Stocks and Shares, Innovative Finance). If I well remember, since last year, you can contribute to multiple ISAs within the same tax year, provided the total contributions do not exceed the annual ISA allowance of £20,000 .
You do not need to invest the money before April 5th to use the allowance — you just need to deposit it into the ISA before the deadline.
Cash ISA will give you around 4%-5% with no risk, with Stocks and Shares ISA you invest your money in stocks or funds, so there is risk involved but potential rewards are also higher.
Regarding providers, I recommend Trading212 ( https://www.trading212.com/isa ). They have both Cash and Stocks & Shares ISAs.