End of the tax year – what it means for your ISA

It’s that time again – the end of the tax year. You might be looking at your accounts and taxes for the year, but don’t forget about the savings opportunity with a Cash ISA too.  

Saving your money in a Cash ISA is a tax-efficient way to save large amounts of money. With an ISA, you can save up to £20,000 each financial year and you won’t pay tax on the interest you earn. The allowance resets at the end of the tax year, so if you don’t use it, you’ll lose it.  

The low down on Cash ISAs  

• You don’t pay tax on interest earned in a Cash ISA – handy if you have a large savings pot or you’re an additional rate payer and are likely to exceed the personal savings allowance 
• While Stocks and Shares ISAs may provide a higher return, they do come with the risk that you may not get back what you put in (depending on how the market moves). Cash ISAs can be a useful tool if you’re nearing retirement and looking to move your investments towards products with guaranteed returns 
• Saving now might protect you from increased tax in the future and you’ll be protected from any changes to personal savings allowances. For example, a pay rise could push you up a tax bracket meaning you pay more tax on investments, but if your savings are already in an ISA then they’re protected.  

Update: It's past April 5th and we're into the new tax year, so the window for adding funds to your ISA for the 2021/2022 year has closed. If you're interested in opening a new Hodge ISA for the 2022/2023 tax year, head over to our ISA page to learn more.