We've answered some common questions about ISAs to help you make the most of your money.
ISA stands for Individual Savings Account and is a tax efficient way to save or invest. Each tax year you get an annual ISA allowance which is the maximum amount you can save or invest in an ISA.
Tax benefits may change in the future. Unlike a Cash ISA, the value of a Stocks and Shares ISA can go down as well as up and you could get back less than you invest.
The total ISA allowance for this tax year (2018/19) is £20,000. You can put your full allowance in a Cash ISA, a Stocks and Shares ISA, or any combination of the two.
Any UK resident can open a Stocks and Shares ISA but you have to be aged 18 or over, and aged 16 or over to open a Cash ISA
You can subscribe to one Cash ISA and one Stocks and Shares ISA per tax year.
The tax year runs from the 6 April through to midnight on the 5 April the following year.
An ISA offers a number of tax advantages. A Cash ISA lets you earn interest on your savings without paying tax on that interest. With a Stocks and Shares ISA you don't have to declare your investments to HM Revenue & Customs and any gains you make are exempt from Capital Gains Tax.
Also, you won't need to pay income tax on any investment income you receive – which is why you'll often hear them described as being 'tax efficient'.
The income that you receive could be in the form of interest or dividends. A dividend represents a share of the profits that a shareholder receives in return for investing in a company's shares.
While there are no guarantees, investments have the potential to offer higher returns than cash over the longer term. A Stocks and Shares ISA should therefore be seen as an investment for at least 5 years.