You’re free to split your ISA allowance any way you like across a Stocks and Shares ISA, Cash ISA, Lifetime ISA (maximum of £4,000) and an Innovative Finance ISA, as long as you stay within the overall limit.
Millions of ISA customers have been issued a warning over March, April and May cash balances. You’re free to split your ISA allowance any way you like across a Stocks and Shares ISA, Cash ISA, Lifetime ISA (maximum of £4,000) and an Innovative Finance ISA, as long as you stay within the overall limit.
For example, you could put £5,000 in a Cash ISA, £4,000 in a Lifetime ISA and the remaining £11,000 in a Stocks and Shares ISA. The allowance is smaller for Junior ISAs. The limit this tax year is £9,000.
The tax year runs from 6 April to 5 April, and the deadline for adding money is midnight 5 April. The ISA allowance this tax year is £20,000 under rules from the Labour Party government and Chancellor Rachel Reeves.
READ MORE Warning issued to anyone who banks with Lloyds, Santander, Halifax, Barclays
Paragon Bank’s Managing Director of Savings Derek Sprawling said: “The key months for ISA savers are March as the tax year draws to a close and April and May as the new tax period starts and the £20,000 ISA allowance resets.”
Paragon’s survey of over 1,000 cash ISA savers showed that 9% of cash ISA savers wait until the end of the tax year before putting money into a cash ISA.
The majority, 67%, invest at the start of the new tax year on 6 April, with the remaining 24% making regular payments into their ISA during the course of the tax year.
Derek added: “It’s normal for people to review their finances towards the end of the tax year and to utilise any of their remaining ISA allowance if they have spare savings. It’s a pattern we have seen over numerous ISA seasons.
“However, I would urge savers not to leave it too late as many providers take best buy accounts off the shelves in the run-up to the tax year end to manage their service levels. Savers with sizable deposits could also incur unnecessary tax on their interest if they keep it outside of the tax wrapper.
“If you do intend to utilise your ISA allowance late in the tax year, give yourself enough time to get the account you want and don’t leave it until the final few days of the tax year.”