What are ISAs?

ISA is short for ‘Individual Savings Account’.
There are two types of ISA – Cash ISA and Stocks & Shares ISA.
A Stocks & Shares ISA allows you to invest up to your maximum allowance of £10,200 tax-efficiently each tax year, so even if you have used your full Cash ISA allowance you can still invest the remaining £5,100 in a Stocks & Shares ISA.
Stocks & Shares ISAs are simply a tax-efficient umbrella under which you can invest in our unit trusts – meaning you have no further tax to pay on your investment returns.
And unlike most other investments, you do not need to record your ISAs in your annual tax return.
You still need to choose the Unit Trusts you want to invest in within your Stocks & Shares ISA.

ISA Limits

The annual ISA allowance has increased to £10,200 for this tax year (2010/11). You can invest the full amount in a Stocks & Shares ISA, or part of this amount as a Cash ISA. You may invest up to £5,100 in a Cash ISA with the remaining amount in a Stocks & Shares ISA, up to the total limit of £10,200.