5th March 2024
The ISA deadline is the 5th April 2024. Find out why this is important and how you can make the most of your savings.
An ISA (Individual Savings Account) is a type of savings account that allows you to save money without paying tax on the interest you earn. In an ISA, you can save up to a certain amount each tax year, which is set by the government. The current limit is £20,000 per tax year (2023/24), and this can be split between different types of ISAs, such as a cash ISA or a stocks and shares ISA. You can't put money into more than one of each ISA every tax year. (For example, you can put your savings into a cash ISA and a lifetime ISA in a year, but not two cash ISAs.)
The ISA deadline is the final date you must pay into your ISA to take advantage of that financial year's tax benefits. The ISA deadline is usually on the 5th April each year.
If you have not used your full annual ISA allowance by the deadline, you will lose the remainder of your allowance for that tax year. The current annual ISA allowance for the 2023/24 tax year is £20,000, and any unused allowance cannot be carried over to the next tax year.
A flexible ISA allows you to withdraw money from your ISA and then replace it in the same tax year without it counting towards your annual ISA allowance.
For example, if you have contributed £10,000 to your ISA in the current tax year, and you withdraw £5,000, you would normally only be able to contribute an additional £10,000 to your ISA in the same tax year. However, with a flexible ISA, you can add the £5,000 withdrawn funds back into your ISA without affecting your annual allowance.
This feature provides greater flexibility to ISA savers, allowing them to access their savings if needed without losing out on their tax-free allowance for the year. However, it is important to note that not all ISA providers offer this feature, so be sure to check with your provider before making any withdrawals or contributions.