Making the most of your ISA allowance

Make your savings work harder with our handy ISA guide. Here’s everything you need to know about the ISA allowance and our ISA accounts.

The ISA allowance for 2024/25 is £20,000.

What’s an ISA?

An Individual Savings Account (ISA) is often a popular choice amongst savers thanks to its tax-free savings offer. There are four types of ISA*: Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs, and Lifetime ISAs. Junior ISAs are also available for children under 18.

Please note: Marsden Building Society only offer Cash ISAs and Fixed Rate Cash ISAs at this time.

Who can open an ISA at the Marsden?

If you’re a UK resident over the age of 18, you have the option to open an ISA with the Marsden. Opening a joint ISA is not possible as this is an ‘Individual Savings Account’.

Why invest in a Cash ISA?

• Tax-free: You can save up to £20,000 without paying tax on the interest you earn.
• Variety: There are various options for Cash ISAs, including fixed rate, easy access, flexible, tracker and notice accounts. Choose the one that works best for you.
• Reach your savings goals: Choose an account that aligns with your savings goals and preferred method of access, whether you prefer to save a lump sum or accumulate your savings over time.
• Tax-free transfers: You can usually transfer your savings from another ISA provider to the Marsden without affecting your tax-free allowance, as long as it’s an arranged ISA transfer. You can download an ISA Transfer form here or contact your local branch to speak to one of our colleagues.

What’s the ISA allowance?

The ISA allowance is the maximum amount of money you can save in an ISA each tax year. This means that you can save your money without having to pay tax on any interest.

The tax year runs from 06 April to 05 April the following year, and for the 2024/2025 tax year, the ISA allowance is £20,000. That’s a significant amount of money to save tax-free, so it’s essential to make the most of it.

However, you should be aware that there’s a limit to this generous tax break. The ISA allowance allows account holders to save up to £20,000 across their ISAs without any tax on the interest earned.

*Please note that the Lifetime ISA and Junior ISA are subject to separate limits, which are lower than the overall ISA allowance.

Does interest count towards the ISA allowance?

No, any interest that you earn on your savings doesn’t count towards your ISA allowance.

When does the ISA allowance reset?

The ISA allowance follows the financial year, which means it resets on 6 April annually. Although, this can sometimes differ depending on what day of the week the sixth falls on.

Does the ISA allowance affect the Personal Savings Allowance?

The ISA allowance is separate from the Personal Savings Allowance (PSA). While the PSA enables you to earn a maximum amount of tax-free interest per year, the ISA allowance allows you to save up to £20,000 tax-free per year.

As a bonus, your ISA allowance doesn’t count towards your PSA. This means you can make the most of your tax-free allowances and save as much as you can without worrying about taxes. For more information about the PSA, visit www.gov.uk (External).

Why are ISAs important for my savings?

ISAs are designed with a zero-tax guarantee, providing you don’t exceed the £20,000 limit. The ISA allowance comes with a ‘use it or lose it’ policy, meaning you can’t roll over any allowance you haven’t used into the next tax year.

Can I withdraw or transfer money from an ISA?

Withdrawals from an ISA will depend on the terms and conditions of your account. For instance, if you have a Branch Cash ISA with us, you could withdraw your funds as often as you need. Keep in mind that a Flexible Cash ISA is the only ISA that doesn’t reduce your remaining tax-free allowance with each withdrawal.

If you have a Fixed Rate Cash ISA with us, you can’t make partial withdrawals during the fixed term. You can close a fixed account prior to maturity; however, you will incur an interest penalty.

Transferring used ISA allowances into a Marsden account may be possible under the terms and conditions of your account.

What happens if I exceed my ISA allowance?

If you have multiple ISA accounts, exceeding the ISA allowance limit can be a genuine concern. However, if this happens try not to panic and withdraw funds. Instead, contact HMRC who will provide you with the necessary guidance.

Ready to explore ISA accounts at the Marsden?

We understand the importance of saving. We’ve been helping our members with their savings goals since 1860! If you’d like to learn more about our range of ISAs, you can browse our ISAs online, or if you’d like to get in touch with your local branch team.