14th April 2025
The new tax year is here, representing a great time to assess your savings strategy. Whatever you’re saving for, understanding your options can help you maximise your tax-free savings.
Each tax year, the government sets a limit on how much you can contribute to your ISAs. For the 2025/26 tax year, the ISA allowance is £20,000. This is the maximum amount you can save or invest tax-free across different types of ISAs.
There are multiple types of ISAs to suit different savings goals and risk appetites:
Cash ISA – A low-risk, secure savings account.
Stocks and Shares ISA – Designed for medium to longer-term investments with growth potential, but investment values can go down as well as up.
Lifetime ISA – Suitable for saving towards your first home or retirement (Available for those aged 18 to 39; a withdrawal penalty applies unless used for a first home purchase or retirement). There are cash and stocks and shares options available.
Innovative Finance ISA – Offers peer-to-peer lending opportunities with potentially higher returns, though these come with increased risk. Designed for medium to longer-term investments.
If you’d like to find out more about ISAs, visit the government's website for more details.
You don’t need to put all your ISA allowance into just one type. Splitting your allowance between different ISAs can help balance risk and returns. For example, keeping some funds in a Cash ISA while also investing in a Stocks and Shares ISA can provide accessibility, security and greater growth potential.
A new tax year is a great time to review your existing ISAs and ensure they align with your financial goals. It’s worth checking that your accounts are working hard for you.
Some providers offer Flexible ISAs, which allow you to withdraw and replace money within the same tax year without affecting your annual allowance. If you think you might need to dip into your savings temporarily, a flexible ISA can give you more freedom without sacrificing your tax-free limit.
If you’re looking to save for your child, you could consider opening a Junior ISA (JISA) for them. For the 2025/26 tax year, you can contribute up to £9,000 into a Junior ISA. These accounts offer a great way to build a savings pot for your child’s future, whether it's for education, a first car, or even their first home. The money belongs to the child and can’t be withdrawn until they turn 18.
We offer a range of Cash ISAs to suit different savings goals. We also offer face-to-face, telephone, or online appointments with our friendly team, who can guide you through our range of savings accounts and support you with your ISA planning.
Please note that Vernon Building Society is not authorised to provide financial advice. If you are unsure about the best option for your circumstances, we recommend speaking with an independent financial adviser before making any decisions.