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ISAs explained

How to keep more of your money

Discover how an ISA account can help you keep more of the interest you earn, year after year.

An ISA (or Individual Savings Account) is a tax-efficient way to save. When you open an ISA account, you can earn tax-free interest on your savings, with a total annual ISA allowance of £20,000 for the 2019/20 tax year.

What are my ISA options?

There are four different types of ISA account. Please note that Yorkshire Building Society only offers Cash ISAs.

Cash ISA

A Cash ISA is a tax-free savings account available from age 16. You don't pay any tax on the interest you earn, so every penny is yours to keep. You can start saving with as little as £1. Once your money is in, then so long as it stays in – it stays tax free.

While you can only have one Cash ISA per tax year, you can split your ISA allowance across different products . For example, our range of Cash ISAs includes Instant and Fixed Rates ISAs.

How do cash ISAs work?

  • Save up to £20,000 in the 2019/2020 tax year
  • Transfer in your savings from existing ISA accounts, either with us or with another provider
  • Get access to your money in the short or medium term, depending on the specific terms and conditions of the account
  • Any withdrawals from tax-free accounts will result in a loss of your tax-free allowance, other than transferring to another ISA, subject to terms & conditions.
  • If you have a fixed rate ISA, you can replace money withdrawn from your ISA without this affecting your annual allowance, as long as the replacement funds are made in the same tax year in which the withdrawal takes place.
  • If you have a break between ISAs of a year or more, you will need to complete a Break Between Subscription Form (PDF). This is a requirement of HM Revenue and Customs and we can’t accept funds into a new ISA account until the form has been completed and returned.

Other types of ISA

The other 3 types of ISA – not offered by YBS – are Stocks & Shares ISAs (from age 18), Innovative Finance ISA (from age 18) and a Lifetime ISA (from age 18). These ISAs are are worth considering for money that you can leave untouched for at least 5 years or more. Although Stocks & Shares ISAs are tax efficient, they are not completely tax-free. By choosing a Cash ISA you will benefit from tax-free interest.

Limits and allowances

You can invest in any combination of the four types of ISA in one tax year up to your total annual ISA allowance limit, which is £20,000 for the 2019/20 tax year; however, the annual contribution limit into a Lifetime ISA is £4,000.

Yorkshire Building Society only offers Cash ISAs.

What if I don't use all my allowance?

As soon as a tax year ends on the 5th April, any allowance for that tax year ends too.

That means if you don't use all your allowance, you'll miss out on using any remaining allowance for that tax year.

Am I eligible?

If you'd like to open a Cash ISA you must be aged 16 and resident in the UK for tax purposes.
If you want to open a Cash ISA and you’re resident in a country outside of the UK for tax purposes you must be a qualifying crown employee or be married or in a registered civil partnership with a qualified crown employee.

Transferring an ISA

Can I transfer my allowance?

Although you can only save into one of each type of ISA in each tax year, you're free to move your money around in different ways, as long as the product terms and conditions allow it.

Transfer from a previous tax year's Cash ISA

Move all or some into another Cash ISA, or a Stocks and Shares ISA or an Innovative Finance ISA without affecting this year’s allowance.

Transfer from the current tax year's Cash ISA

Move money saved in a Cash ISA this tax year with the same or a different provider as long as you move the whole amount without splitting it. Alternatively you can transfer all or some of the balance into a Stocks and Shares ISA and/or Innovative Finance ISA up to the maximum allowance of £20,000. Please check with your existing ISA provider for any charges applicable on transfer.

Transfer from a previous tax year's Stocks and Shares ISA

Move all or some into another Cash ISA, or a Stocks and Shares ISA or an Innovative Finance ISA without affecting this year’s allowance.

Transfer from the current tax year’s Stocks and Shares ISA

Move the whole amount saved this tax year into another Stocks and Shares ISA and if it’s less than £20,000 you can then save the remaining allowance in the same Stocks and Shares ISA. You can also transfer into a Cash ISA and/or an Innovative Finance ISA up to the maximum allowance of £20,000. Please check with your existing ISA provider for any charges applicable on transfer.

Transfer from the current tax year’s Innovative Finance ISA

Move the whole amount saved into another Innovative Finance ISA and if it's less than £20,000 you can then save the remaining allowance in the same Innovative Finance ISA. You can also transfer into a Cash ISA and or Stocks and Shares ISA. Please check with your existing ISA provider for any charges applicable on transfer.

You can transfer your ISA online. If you are not registered for an online account you can register here.You can also transfer your ISA in any of our branches or agencies. Just download and complete the application form below and take this to a branch or agency. If you open a new account in one of our branches or agencies you will able to register for online banking from the following day.

ISA application forms

Although you can only save into one of each type of ISA in each tax year, you're free to move your money around in different ways, as long as the product terms and conditions allow it.

 

ISA FAQs

Can I cancel a Cash ISA account

Yes, you can cancel your account if you change your mind within 14 days. There's no notice or charge - we'll simply refund your money along with any interest it's earned and you'll be free to open another ISA in the same tax year.

To cancel within 14 days, simply write to the branch or agency where you opened your account or call 0345 1200 300*.

If you do not cancel your subscription within the 14 day time period please note you will have automatically subscribed to a Cash ISA for this tax year and you will not be able to open another Cash ISA with us or any other provider in the same tax year.

What are the benefits of an ISA?

Some of the benefits of a Cash ISA include:

  • Earn tax-free interest on your savings
  • Save up to £20,000 in the 2019/2020 tax year
  • Replace money taken out from your ISA without affecting your annual ISA allowance (if your ISA is flexible).
How many ISAs can I have?

You can only have one Cash ISA per tax year, but you can split your ISA allowance across various products, such as the Help to Buy ISA, or Fixed Rates ISAs.

Are ISAs tax free?

Cash ISAs give you tax-free interest, compared to Stocks & Shares ISAs, which are tax efficient but not entirely tax-free.

How much can I put in a Cash ISA?

In one tax year you can put in up to £20,000; the annual contribution limit for a Lifetime ISA is £4,000.