Use it or lose it: what you need to know about ISAs before 5 April

You might know that Individual Savings Accounts (ISAs) allow you to deposit up to £20,000 each year without paying any tax on the interest. However, what many people don’t know is you can't 'roll over' your ISA allowance from one year to the next. 

Simply, if you don’t use it before it expires, you’ll lose it, just like when you have unused data or minutes left on your phone contract at the end of the month!

If you want to open an ISA before the end of the tax year on 5 April or use up any ISA allowance you have left, here are some things that might be helpful to know.

You don’t need a lump sum 

Not everyone has £20,000 knocking about, but the good news is that you don't need a lump sump to open or pay into an ISA. Our Easy Access Cash ISA, for example, can be opened in a branch or via post with a minimum of £50.

Easy access ISAs can be a great way to get into the habit of saving little and often. You can top them up whenever you like, with as little or as much as you have, as long you do not exceed your £20,000 annual limit.

You can still have access to your money

Some savers avoid ISAs because they think they’ll have limited access to their money, which can be frustrating if you have an emergency.

We know how vital immediate access to your savings can be, but that doesn’t mean you can’t still reap the tax-free rewards of an ISA. Easy access cash ISAs traditionally allow you to withdraw money whenever you like, meaning you're not at a loss if you have to dip into your savings unexpectedly.

If immediate access to your money isn't a concern (or you want to limit how often you can dip into your funds!), a Notice ISAs could be a good option for you. A Notice ISA specifies a set notice period you have to give before you can withdraw any savings. Notice ISAs can sometimes have a higher interest rate than an easy access ISA because of this. 

Withdrawing and replacing money

In 2016, the government changed ISA rules, allowing providers to give customers more flexibility. At Newbury Building Society, our adult ISAs are fully flexible, meaning you can replace any funds you withdraw without affecting your annual £20,000 allowance.

This change wasn’t mandatory, so not all ISA providers decided to implement it. If this flexibility is important to you, make sure you check any ISAs you currently have or plan to open in the future.

Moving to another provider to make the most of rates and extras

If you’ve opened an ISA in a previous tax year, it’s worth checking your current interest rate. Although you can currently only pay into one ISA each financial year, you can use ISA transfers to your advantage.  

Your ISA funds can be moved from one provider to another if the provider accepts transfers in, allowing you to make the most of better rates or benefits. Transferring an ISA means your money will remain tax-free, which wouldn’t be the case if you closed the account, withdrew the money and paid it into a new account. Both our Easy Access and Notice Cash ISA accept transfers in from other providers.

Find out more about ISAs and our other savings accounts

For more information on our range of savings accounts, make an appointment with one of our qualified savings advisers, call 01635 555700, or check out our dedicated ISA webpage.

Whilst we have no plans to withdraw these accounts, they may be withdrawn without notice.

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