You are allowed to have one ISA in a tax year, which runs from April 6th until April 5th the following year. Anyone aged 18 or over and lives in the UK can open an ISA which means you get your savings protected from tax.


What is an ISA?


An ISA is an Individual Savings Account in which you can save a specific amount and any earnings within your ISA are tax free. For the 2015/2016 tax year, the amount you can save in an ISA is £15,240. There are currently two types of ISA you can have: a cash ISA or a stocks and shares ISA. With a cash ISA all of your savings are just held as cash, whereas in a stocks and shares ISA, you can have both cash and investments within your ISA.


Why you need to use your allowance!


Each tax year you get a new allowance to be able to save within your ISA. This amount is increased each year, though that doesn’t necessarily mean that’s always the case. On the 5th April, any of your allocation that you’ve not used disappears. It doesn’t get to roll over to the next tax year, you just miss out on that allocation. So, for example, if you’ve saved £6,540 in your ISA by 5th April, then you’ve got £8,700 left. On 6th April, your allocation starts again, so you miss out.


Start saving as soon as you can.

On April 6th, you can start saving in your new tax year’s allowance. The best way to save the most during the year is to start as soon as possible. If you can, on April 6th, transfer some money over to your ISA so that you’ve made a start straight away. I wrote a post last week about some easy ways to save, so try and implement some of those if you can.

Related post: 5 Easy Ways To Save Money

ISA Allowance


I have a stocks and shares ISA with Hargreaves Lansdown, which I really recommend. It was really easy to open an ISA with them; you just fill in a form online and that was it! You can then add money and start investing; it’s as easy as that. You do need to remember that if you invest, your investments can go down as well as up, depending on what the stock market is going.


Remember, you can also open an ISA for your children! We’ve got one for The Frugal Baby as he received some money when he was born, so we opened a savings account for him. The allowance for a child in the 2015/2016 tax year is £4,080 and this will increase each year too. It is just as easy to open a Junior ISA for each child online, you fill out a form and get started the same way.



So, you need to make sure you use your ISA allowance before it’s too late! You only have 11 days left to do so.

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