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Guide to ISAs: allowances and rules explained

Guide to ISAs

What is a cash ISA?

  • A cash ISA is a savings account that allows you to save your money and earn interest free of UK income tax
  • You can save up to £5,940 of your £11,880 annual ISA allowance 1 in the 2014/15 tax year

You can only subscribe to 1 cash ISA with 1 provider each tax year but you can still hold savings in multiple Cash ISAs from previous tax years. You need to be resident in the UK for tax purposes and aged 16 or over to hold an Instant Cash ISA, or 18 or over to hold a Flexible Cash ISA.
 

What does the government’s announcement about new ISAs mean?

The government has announced that from 1 July 2014, ISAs will simplified, with equal limits for cash and investments. For the 2014/2015 tax year, the limit will increase to £15,000 and you can save it all in cash, investments or a combination of both. Any subscriptions made to an ISA between 6 April 2014 and 30 June 2014 will count towards the £15,000 limit.

 

I’ve used my annual cash ISA allowance for this year

Your annual ISA allowance in the 2014/15 tax year is £11,880 so you can invest a further £5,940 in an investment ISA (also known as a stocks and shares ISA).

 

What are the tax benefits of a cash ISA?

You pay no income tax on any of the interest you earn from the savings in your cash ISA.

 

How much can I save in a cash ISA?

You can save £5,940 in the 2014/15 tax year.

 

Can I withdraw cash from my Instant Cash ISA – Issue 1?

Yes, but do remember that all funds paid in during the tax year cannot exceed your annual ISA allowance. Therefore, any funds withdrawn once this limit has been reached cannot be replaced in that tax year. For example, assume that you have an annual cash ISA limit of £5,940 for the 2014/15 tax year, and that you have deposited £4,940 into your cash ISA and then withdraw £2,000. Even though you’ve taken out this money, you will only be able to put in a further £1,000 in the same tax year.

 

Can I withdraw cash from my Flexible Cash ISA?

Yes, you have the benefit of a fixed rate while still having access to some of your money if you need it. You can make up to 3 free withdrawals during the 3-year term, each of up to 10% of the balance at the time.

For Flexible Cash ISA – Issue 2 & 3, partial Transfers-Out aren't allowed. You can close the account or Transfer-Out the whole balance before the maturity date but you'll be charged the equivalent of 270 days’ tax-free interest based on the balance at the time. If there’s insufficient earned or accrued interest (or where you have chosen the monthly interest-payment option), the charge will be taken from the funds in the account and you may get back less than you deposited.

The charge does not apply if your account is closed during the cooling-off period or as a result of death or bankruptcy. If you want to transfer your Flexible Cash ISA to another Barclays account before the maturity date, please visit a branch or call us on 0800 494949 2

 

Can I Transfer-In my cash ISA to Barclays?

Yes. With our Instant Cash ISA – Issue 1, you can Transfer-In at any time. If you have a Flexible Cash ISA, you have up to 30 days from opening it to do so.

Never just withdraw your savings as cash and pay it into your new ISA, otherwise you’ll lose the associated tax benefits. If you do the transfer correctly, any balances from your previous tax year ISAs won’t count towards this year’s annual allowance.

See our transfer guide

 

What cash ISAs does Barclays offer?

Our Instant Cash ISA – Issue 1 and Flexible Cash ISA – Issue 3 are available to existing and new customers. You’ll need to apply in branch if you don't already bank with us.

 

Can I open a cash ISA online?

Yes, you can open a cash ISA in Barclays Online Banking if you’re registered.

 

Five ways to maximise your cash ISA

"Why my cash ISA works for me"

   

"My cash ISA, my future"

Cash ISAs and Investment ISAs

Important information
 
1. The level and basis of tax can change and the value of tax relief depends on the individual taxpayer. The government's favourable tax treatment of ISAs may not be maintained.
 
2. To maintain a quality service, we may monitor and record phone calls. Read our call charges and information

Barclays Bank PLC. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register number: 122702). Barclays Bank PLC subscribes to the Lending Code which is monitored and enforced by the Lending Standards Board. Further details can be found at www.lendingstandardsboard.org.uk. Barclays Insurance Services Company Limited is authorised and regulated by the Financial Conduct Authority (Financial Services Register number: 312078).

Barclays Bank PLC. Registered in England. Registered no. 1026167. Barclays Insurance Services Company Limited. Registered in England. Registered no. 973765. Registered office for both: 1 Churchill Place, London E14 5HP. ‘The Woolwich’ and ‘Woolwich’ are trademarks and trading names of Barclays Bank PLC. Barclays Business is a trading name of Barclays Bank PLC.


 

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