Unlike other savings or investment accounts, ISAs offer great tax incentives. They are also flexible, so you can find the right fit for your unique situation.
In this article, we’re uncovering five characteristics of ISA to help you on your journey. This should help you to reach your goals, while staying within the rules.
While this article is intended to be helpful, it is not advice. Please be aware that with investing comes risk, and there is a chance that you may get back less than you put in. If you’re unsure, consider financial advice.
1. You can save or invest up to £20,000 each tax year
Annually you can deposit up to £20,000 into an ISA. This money will benefit from some serious perks, such as no tax to pay on any income. Plus, no capital gains tax on investments.
But if you don’t use it, you lose it. The £20,000 allowance resets every tax year and any unused allowance will not be carried over.
2. You can have more than one ISA
Whatever your motivation is for opening an ISA, you can have more than one type of ISA and can split your £20,000 allowance across several. Triodos Bank offers a Stocks and Shares ISA, Cash ISA, and an Innovative Finance ISA. The best part is that you can mix and match to create a tax-efficient solution that’s best for you.
Thanks to new rules which came in on 6 April 2024, you can now pay into several ISAs of the same type in the same tax year. For example, you could pay some of your ISA allowance into a cash ISA with one bank, and the rest into a cash ISA with a completely different bank. Just so long as you don’t go over your £20,000 allowance.
3. Despite the name, you can save and/or invest with an ISA
The name (Individual Savings Account) often causes confusion as it implies it’s purely a way of saving money, but it isn’t. It also applies to investment ISAs and Triodos Bank has two on offer – Stocks and Shares ISA and Innovative Finance ISA. These enable customers to invest either globally through impact investment funds or locally through the crowdfunding platform.
4. You can transfer some ISAs
If you have a Stocks and Shares ISA or a Cash ISA already, it’s straightforward to switch over to Triodos – simply open your new ISA and complete a transfer form. This will ensure you retain the tax benefits of your transferred ISA. If you try to withdraw the money yourself, you may have to pay tax, and you’ll lose the ISA status.
5. ISAs can reflect your values
Your money is powerful, and what you do with it matters. Most ISAs invest in fossil fuels, and companies responsible for plastic pollution, or degrading work conditions. But it doesn’t have to be that way. If you want to help reduce carbon emissions, restore the environment and protect workers, you can invest in sustainable companies. It’s a simple way to make the world a better place.
If your current ISA provider isn’t putting the planet first you might be ready to start again with an ethical ISA.
William DohertyIf I have a Triodos cash ISA how do I switch it to a Stocks and shares one?
Triodos Bank UKHi William, thanks for the comment. If you don’t currently have one, you'll need to apply for a Triodos Stocks & Shares ISA through the Mobile App before you can make a transfer into it. Then you'll need to complete a transfer form. You can find a how-to guide with this form at https://www.triodos.co.uk/help. Please do get in touch with our contact team if you need any assistance. Many thanks, Alana
Laura SalisburyNo. You still can’t pay £20,000 across different banks or building societies? Also, do you not have a £20,000 allowance for cash ISAs and a separate £20,000 allowance for S&S ISAs? I think not, but no-one is ever clear on this. ISAs rules are rather more complex than many banks and commentators reveal.
Triodos Bank UKHi Laura, Thanks for your comment. Under the current rules (for the 2023/24 tax year), the maximum you can pay into ISAs is £20,000 each tax year. The ISA allowance applies across all the different types of ISA, so you don’t have a separate £20,000 allowance for cash ISAs and a separate one for stocks and shares ISAs. The £20,000 ISA allowance can be split between different types of ISAs and different providers. For example, you could pay into a Stocks and Shares ISA with one company, and a cash ISA with a different company. But you can’t pay into two ISAs of the same type in the same tax year – for example, you can’t pay into two different cash ISAs in the same tax year. Keep in mind that this isn’t intended as financial advice and you might want to consider advice if you’re not sure. There’s also free, impartial guidance from Money Helper on a range of money issues at www.moneyhelper.org.uk. Many thanks, Alana
gerbo huismanIf I have already 85.000 in a savings account (the maximum covered through the FRCS scheme), what would happen to (additional) capital invested in a stocks and shares ISA in case of financial failure of the bank?
Triodos Bank UKHi Gerbo, thank you for your comment. The investments within a Triodos Stocks and Shares ISA are not covered by the Financial Services Compensation Scheme (FSCS). However, any uninvested money held in a Triodos investment account (such as a Triodos Stocks and Shares ISA) is covered by the FSCS up to £85,000. Please note that the £85,000 will apply to the total of all eligible deposits with Triodos Bank rather than per account or product. For more information, please visit www.triodos.co.uk/financial-services-compensation-scheme. Many thanks, Alana
Maureen SchipperHelpful as an introduction.
John StarbuckI am unable to discern the subtleties between supporting the environment via your FSCS protected cash ISAs and your non-FSCS protected IFISAs - either way, it seems that you lend my money to environmental good causes, so I am unable to rationalise why I should put my capital at risk by lending my money via your IFISAs