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Guide to ISAs

Investment ISA

What is an ISA?

The Individual Savings Account scheme was set up by the Government to give you tax advantages on your savings. There are 2 types of ISAs : a cash ISA and an investment ISA (also known as a stocks and shares ISA ). You'll earn interest free of UK income tax with a cash ISA and interest free of UK income and capital gains tax with an investment ISA.

Read on to learn more and to compare ISAs.

How to pay less tax on your savings

Our comprehensive guide to ISAs answers your questions on cash ISAs and investment ISAs so you can compare ISA options and have the basic information you need to help you make your own decisions. Click on one of the questions below to reveal the answer.

You must be resident 2  in the UK to hold an ISA, and you must be aged 16 or over to hold a cash ISA and 18 or over to hold an investment ISA.

Remember: in the simplest terms, ISAs give you tax advantages on your savings so you get a higher return on your money if you’re a tax payer than you would otherwise.

Investment ISAs: getting started

Barclays customer Jane Sulkin discusses and how she assessed her attitude to risk before choosing her investment ISA and why she felt a long-term commitment would be the best option for her

Cash ISAs and investment ISAs

Barclays savings expert Andy Gray looks at ISA allowances and the differences between cash ISAs and investment ISAs, in particular the balance between long-term commitments and instant access savings

What is the difference between a cash ISA and an investment ISA?

A cash ISA is like a normal savings account but you don’t have to pay UK income tax on your interest, provided all ISA conditions are met. Some cash ISAs are offered as a fixed-term or fixed-rate account.

An investment ISA allows you to purchase investments in a 'tax-efficient' manner – your returns are free of UK Income and Capital Gains Tax. As your money is invested directly or indirectly in stocks and shares, the value of your investment can rise or fall so you could end up with less than you invested.

The investment ISA wrapper lets you invest in funds which have no fixed maturity date, although they are designed to be held for the medium to long term (usually five years to ten years). Their value at any particular time will always depend on how well the underlying investments perform so if this has been poor it could be less than the original amount you invested, irrespective of how long you have held the investment.

How much can I save in an ISA?

Your annual ISA allowance is £11,520 in the 2013/2014 tax year. Of this, up to £5,760 can be saved in a cash ISA with one provider. All of your allowance or the remainder can be saved in an investment ISA. Bear in mind that the value of tax relief depends on individual circumstances and tax rates are subject to change; if you don't pay tax, you will not benefit from any tax relief. Annual limits are also subject to review and the Government's favourable tax treatment of ISAs may not be maintained.

And what are my annual ISA allowances?

ISA Subscription Limits
Tax Year Cash ISA Limit Stocks & Shares (Investment) ISA Limit Total ISA Limit
2013/2014 £5,760 £11,520 £11,520

I have used all my annual cash ISA allowance for this tax year.

As your total ISA allowance is £11,520 you can still invest a further £5,760 in an investment ISA.

How many ISAs can I have?

There is no limit on the number of ISAs you can hold but you can only open and subscribe to one cash ISA and one investment ISA per tax year. This could be a cash ISA with one provider and an investment ISA with a different provider, or both with the same provider. However, be sure that you don't exceed the maximum amount you're allowed to put into ISAs each year – up to £11,520 in total, including up to £5,760 in a cash ISA in the current tax year.

As a reminder, if you have invested previously and opted for an auto ISA facility, please ensure you do not exceed the annual ISA limit.

What ISAs do you offer?

Investment ISA

If you're comfortable with the risk that you could lose money, you don’t need advice and you’re interested in taking out an investment ISA, why not look at our ISA products range.

Instant Cash ISA – Issue 1

Save up to £5,760 tax-free with our instant access cash ISA. Transfers-In from other ISAs are allowed. Interest rates range from 1.29% AER/1.28% tax-free pa to 1.49% AER/1.48% depending on the balance. Rates are variable.

What's the next step?

Use our guides and tools to:

  1. Find out more about investment risk
  2. See our ISA products

How to apply: 

  • If you would like assistance or are an existing Barclays customer and would like to make an application by telephone, please call 0800 445443 1.
  • Remember: if you are unsure if an investment is right for you, please seek independent financial advice.
Important information
1. Lines are open 8am–7pm Monday to Friday and 9am–3.30pm on Saturday. To maintain a quality service, we may monitor and record phone calls. Calls to 0800 numbers are free when calling from a UK landline. Charges may apply when using a mobile phone or when calling from abroad.
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2. It is your responsibility to establish your residency status prior to submitting this application form. If you have any doubts about your status, please contact HM Revenue & Customs on +44 135 535 9022 or alternatively you can email them via the HMRC website .
3. AER (Annual Equivalent Rate) illustrates what the interest rate would be if interest was paid and compounded once each year. 
4. Tax-free: Indicates that interest is exempt from UK income tax provided all ISA conditions are met. The level and basis of tax can change and the value of tax relief depends on the individual taxpayer.