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Guide to ISAs: allowances and rules explained

What is an ISA?

Tax-free savings account

An ISA is an Individual Savings Account that allows you to save or invest your money without paying tax on the interest or on the investment returns you receive.

To open an ISA, you need to be a UK resident for tax purposes and aged 16 or over. For some ISAs, you may need to be 18 or over.


A yearly allowance

For each tax year, there is a limit to the amount you can deposit into your ISA. The limit for the 2014/2015 tax year is £15,000. You can only open (or subscribe to) one cash ISA and one investment ISA in each tax year. You can transfer in money from old ISAs into your current ISA if you would like to keep all your ISAs in one place.

Tax-free interest year after year

The tax year runs from 6 April to 5 April. If you choose not to open a new ISA, you can top up your existing ISA with a lump sum or add a little bit at a time until you reach the allowance for that tax year – depending on your ISA. You will continue to earn tax-free interest on your combined balances year after year.


Cash ISA and investment ISA

You can choose to either put your allowance of £15,000 into a cash ISA, an investment ISA or both. Decide which is more appropriate for you – for example, you may be looking for a low-risk savings option with easy access to your money, or perhaps you’re prepared to take on some risk for a potentially higher return.

Your ISA allowance

Use our allowance tool below if you’re considering opening both a cash and investment ISA, but aren’t sure how to split your funds between them.


How much are you looking to save and invest?

£0 £15,000
Cash ISA:£0
Investment ISA:£0
Unused allowance:£0

Did you pay money into an ISA between 6 April and 1 July 2014?

The government has increased the allowance for ISAs to £15,000 from 1 July 2014. You can now pay up to this amount into your cash ISA, investment ISA or a combination of both – excluding any of the allowance you’ve already used this tax year.

Remember, you can only have one cash ISA and investment ISA in each tax year. If you choose to open another of either type of ISA in the same tax year, make sure you close your current ISA and transfer the money to the new one.

Transferring your ISA

Why transfer?

You can transfer all or some of your previous tax year ISA deposits between ISA providers at any time. And you can now transfer between cash ISAs and investment ISAs.

Before transferring, refer to the specific terms and conditions of your current ISA to understand your options, as some providers may charge for transferring out.

How to transfer

It's easy to make a transfer to us – just visit your nearest branch, call us on 0345 744 5445 1 or log in to Online Banking to complete a transfer form and we’ll do the rest. You’ll need to provide the name of your current ISA provider and the account details (eg sort code & account number).

It can take up to 15 working days for a cash ISA transfer to be completed, and longer for investments. During this period your money in investment ISAs may not be invested in the stock market.

Please note, if you withdraw the money as cash and pay this directly into your new ISA, the interest you’ll receive will no longer be tax free. This applies even when transferring between ISAs in the same bank. So it’s important to always complete a transfer form.

Withdrawing money from an ISA

You can only deposit into one cash ISA and one investment ISA in any single tax year, but you may be able to withdraw funds from your current or previous years’ ISAs at any time.  Please check your terms and conditions.

Once you’ve taken the money out, you’ll only be able to make deposits up to your remaining allowance for the current tax year.

Cash ISA vs investment ISA

Not sure which ISA is for you? The table below may help you to decide.

  Cash ISA Investment ISA
Interest rate

Either variable or fixed interest rate options, depending on the type of cash ISA you choose

Linked to the performance of the stock market

Opening deposit amount

Start saving from as little as £1. Depending on the cash ISA you have, you could deposit a lump sum, set up a monthly standing order or choose to make deposits whenever you have spare cash to save

If investing in funds, the minimum investment is £500, but you can choose to invest further lump sums or use a regular investment service for monthly subscriptions starting from as little as £50

As investments are long-term holdings, you should only consider them once you have enough money set aside to cover emergencies and unexpected life events

Access to your money

Depending on the specific cash ISA you choose, you could access some or all of your money at any time with no charge

Investments should be held for the medium to long term (5–10 years). They can be withdrawn at any point (in the majority of cases), but you may face exit penalties or a fall in the value of your investments depending on when you choose to do this


Low risk to your money. How much interest you make will depend upon the interest rate and whether it’s fixed or variable

Risk of losing some or all of your money


There are no admin or management costs. With our Instant Cash ISAs you won’t be charged for withdrawing money. Our fixed rate cash ISAs give you the flexibility to take some money out without being charged, but you may get charged a penalty fee for further withdrawals

There are costs to investing including annual management charges, fund admin and ISA admin fees

Our ISAs

Home insurance

Cash ISA

Whether you're looking for a fixed rate on savings or instant access to your money, we offer 2 types of cash ISA – so you can choose which suits you best.

Investment ISA

Investment ISA

You can open an investment ISA on its own or as well as your cash ISA, as long as the combined deposit is no more than £15,000.


  • If I open a cash ISA at the end of one tax year, what happens to the interest in the new tax year?

    The interest you earn on your money in a cash ISA remains tax free for the life of the ISA, providing all ISA conditions are met. The rate of the interest paid might change, but it will remain tax free. However, the government may change the ISA rules in the future.

  • If I transfer my previous years’ deposits into a new ISA, does it count towards my current tax year ISA allowance?

    No, it doesn’t. You are free to transfer previous years’ ISA funds into a new cash or investment ISA and this won’t count towards the current year’s allowance. For example, if you have £20,000 in previous ISAs, you can transfer the balance into your new ISA and still have your £15,000 allowance for the current tax year. The interest on the combined balance will also be tax free.

    When transferring between ISAs, remember that if you withdraw the money as cash and pay this directly into your new ISA, the interest you’ll receive will no longer be tax free. This applies even when transferring between ISAs in the same bank. So it’s important to complete a transfer form, which you can do in branch, over the phone or by logging into Online Banking.

Important information
1. Lines are open Monday to Friday 8am-9pm, Saturday 9am-8pm and Sunday 10am-4pm. To maintain a quality service, we may monitor or record phone calls. Read our call charges and information

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