Individual Savings Accounts (ISAs), allow you to save up to £20,000 per year (as at 2019/20) tax-free.

There is a range of different ISAs you can choose from – so be sure you understand their unique features before you decide which one best suits your requirements.

You can split the £20,000 allowance between ISAs to spread your funds over a range of investment opportunities. It is worth assessing them all as if you don’t use your £20,000 allowance it will not roll over to the following year.

Read on for an overview of the main types of ISA.

Cash ISA

Cash ISAs are available to UK residents, aged 16 or over, and allow contributions of up to £20,000 per tax year (2019/20).

You can choose either an easy access or fixed-term account, which typically impacts the rate of return based on the length of commitment. Cash ISAs are FSCS protected, meaning you’re covered up to £85,000 of savings per individual, per financial institution.

Stocks and Shares ISA

A stocks & shares ISA is a tax-efficient investment account that lets you put money into a range of different investments, while offering the possibility of higher returns than cash ISAs, but only if you’re happy to take capital risk.

The range of investments can include individual shares, investment funds, trusts and government bonds or corporate bonds.

Innovative Finance ISA

Innovative Finance ISAs (IF-ISAs) are investments that allow consumers to lend and earn tax-free interest through a Peer to Peer lending platform. Innovative Finance ISAs pair up willing lenders (or investors) with individual and business borrowers through an easy-to-use online platform.

With an IF-ISA, you are loaning your money directly to borrowers across a range of project types in different industries. Each IF-ISA providers’ offering will differ so ensure you read their product terms before investing.

Kuflink is an example of a Peer to Peer platform where investors have the security of UK property-backed investments*. Our innovative finance ISA offers 1, 3 or 5-year terms, with interest of up to 7% per annum*. Kuflink pays IF-ISA interest annually and does not charge platform or investment fees.

*Capital is at risk and Kuflink is not protected by the FSCS. Past returns should not be used as a guide to future performance. Securing investments against UK property does not guarantee that your investments will be repaid and returns may be delayed. 

Lifetime ISA

You can use a Lifetime ISA to buy your first home or save for later life. You must be 18 or over but under 40 to open a Lifetime ISA. You can put in up to £4,000 each year until you’re 50.

The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year. You can hold cash or stocks and shares in your Lifetime ISA or have a combination of both.

Top Tip: If you choose to pay in the maximum amount of £4,000, this will still leave £16,000 that can be paid into different types of ISA.

Junior ISA

This account allows parents or any other friends or relatives to put up to £4,368 (for the tax year 2019/20) into an ISA for a child aged under 18. There is a choice of either cash or stocks and shares. The latter are riskier but generally outperform cash over the long-term. The allowance can be split between both types of investment.

Once the child reaches 18, a junior ISA automatically turns into a standard ISA and control of the account passes to them.

Any questions? Take a look at our ISA FAQs.

Transferring or moving your ISA

You can transfer Cash, Stocks and Shares ISAs and even IF-ISAs you currently hold with another provider. Previous year’s subscriptions don’t count towards your annual ISA allowance but current year subscriptions must be transferred in whole and will count towards your ISA allowance.

However, you cannot simply take the money out of one ISA to put into another, as your funds will lose their ISA status. You need to arrange a transfer with your ISA provider to ensure that the investments remain within the ISA wrapper.

To find out more about transferring, see here.

Choosing the Right ISA for your Investments

You can split your annual allowance of £20,000 between different types of ISA, allowing you to spread your investments, but how do you choose the right one?

You should first consider what it is you want to achieve, how long you are able to invest your money for and the level of risk you are willing to take.

Do your research, look at the reputation of the providers you are exploring and look at what they offer. Pick the provider that does what you need and want it to do.

Each type of ISA has risks, and you should have a clear understanding of how these investments work, and whether they provide the right opportunity for you. If in doubt, speak to a qualified financial advisor for further information.

If you’d like to talk to one of our Investor Relations team about the Kuflink Innovative Finance ISA, contact us here, and we’ll be happy to help.

Kuflink provides blogs for your general information only.  Blogs do not constitute advice and should not be relied upon by you for making investment decisions. Products and services referred to will not be suitable for all investors and appropriate independent financial advice should always be sought where necessary.

What is an Innovative Finance ISA?

Innovative Finance ISAs (IF-ISAs) are investments that allow consumers to lend and earn tax-free interest through a Peer to Peer lending platform. Innovative Finance ISAs pair up willing lenders (or investors) with individual and business borrowers through an easy-to-use online platform.

With an IF-ISA, you are loaning your money directly to borrowers across a range of project types in different industries. Each IF-ISA providers’ offering will differ so ensure you read their product terms before investing.

Kuflink’s IF-ISA is available to new investors or those wishing to transfer in funds, with the option to invest up to £20,000 per annum tax-free. Choose from 1, 3 or 5-year terms, with interest of up to 7% per annum*. Kuflink’s IF-ISA pays interest annually and does not charge platform or investment fees.

* Capital is at risk and Kuflink is not protected by the FSCS. Past returns should not be used as a guide to future performance. Securing investments against UK property does not guarantee that your investments will be repaid and returns may be delayed. Tax rules apply to IF ISAs and SIPPs and may be subject to change. Kuflink does not offer any financial or tax advice in relation to the investment opportunities that it promotes.

How many IF-ISAs can I have?

You can have multiple ISAs, but you are only allowed to open one new IF-ISA with a single provider per tax year. As of the 2019-20 tax year, you are allowed to invest up to £20,000 into an ISA, collectively accounting for Cash, Stocks & Shares, Lifetime, Help to Buy** and Innovative Finance ISAs.

**The Help to Buy ISA closed to new accounts at midnight on 30 November 2019

Can I carry my ISA allowance forward?

No. The annual allowance of £20,000 runs from 6 April one year to midnight on 5 April the following year, meaning that if you don’t use your annual allowance within that period, it will be lost.

What if I exceed my ISA allowance?

If you have accidentally exceeded your ISA allowance or opened an account you are not entitled to; you should not attempt to put your mistake right yourself but report it to HMRC by calling 0300 200 3300.  They will assess your situation and tell you exactly what to do next.

Should you be unaware of your error, HMRC will also check your contributions and accounts at the end of each tax year.  If they find that you have made a mistake, they will contact you and explain the process of how to “repair” your ISA step by step.  Please note that any investments that were made in excess of your allowance will not be eligible for tax exemption.

Can I transfer my IF-ISA?

Yes, you can transfer IF-ISAs. Previous years subscriptions don’t count towards your annual ISA allowance but current year subscriptions must be transferred in whole and will count towards your ISA allowance.

Can I switch my IF-ISA mid-year?

Yes. You can switch during the year but be aware that current years subscriptions must be transferred in whole and will count towards your ISA allowance. Previous years subscriptions will not count towards your annual ISA allowance.

Can I withdraw ISA money?

The point at which you can withdraw funds from an ISA depends on the type of ISA you have, so you will need to check the terms and conditions. Some accounts offer instant access. However, with the Kuflink IF-ISA, you will not be able to withdraw funds early, you will need to wait until the end of your chosen term.

What happens to my IF-ISA if I die?

If you are married, you can leave your ISAs to your spouse or civil partner and they may receive an Additional Permitted Subscription allowance equal to the amount held in your ISA accounts. For example, if you leave £10,000 in ISAs to your spouse, their allowance will increase from the normal £20,000 to £30,000 to encompass the inherited funds.

What happens to my IF-ISA if I move abroad?

If you are a non-UK resident, you will only be able to open an IF-ISA if you or your spouse perform duties of a Crown employee, such as being a member of the UK armed forces, a civil servant or a diplomat. These exceptions only apply if the duties are treated as being performed in the UK.

While it is possible to retain access to existing ISAs when you live in another country, you will be unable to open new accounts or make contributions to existing ISAs.

If you’d like to talk to our Investor Relations team, contact us here, and we’ll be happy to help.

Kuflink provides blogs for your general information only.  Blogs do not constitute advice and should not be relied upon by you for making investment decisions. Products and services referred to will not be suitable for all investors and appropriate independent financial advice should always be sought where necessary.

We’ve just launched a brand-new TV advert where we talk about our Innovative Finance ISA and how it could earn you up to 7% interest pa*.

What is an Innovative Finance ISA?

Innovative Finance ISAs (IF-ISAs) are investments that give consumers the opportunity to lend and earn tax-free interest through a Peer to Peer lending platform. Innovative Finance ISAs pair up willing lenders (or investors) with individual and business borrowers through an easy to-use online platform.

How do IF-ISAs work?

With an IF-ISA, you are loaning your money directly to borrowers across a range of project types in different industries. Each IF-ISA providers’ offering will differ so ensure you read our product terms before investing.

The Kuflink IF-ISA

By opening a Kuflink IF-ISA you can earn up to 7% pa* interest tax-free, with a minimum investment of just £100. You’ll lend to a diverse range of business opportunities all secured against UK property* and, with our easy to use online platform, it only takes a moment to get started.

Can I open multiple IF-ISAs?
You are only allowed to open one new IF-ISA with a single provider per tax year. As of the 2019-20 tax year, you are allowed to invest up to £20,000 into an ISA, collectively accounting for Cash, Stocks & Shares, Lifetime, Help to Buy** and Innovative Finance ISAs.

Talk to us about the Kuflink IF-ISA!

To open your IF-ISA, transfer your existing IF-ISA to Kuflink or if you simply want to discuss the product further, book your call with one of the team here. Alternatively, login to your Kuflink account and visit the IF-ISA page for more details.

*Capital is at risk and Kuflink is not protected by the FSCS. Past returns should not be used as a guide to future performance. Securing investments against UK property does not guarantee that your investments will be repaid and returns may be delayed. Tax rules apply to IF ISAs and SIPPs and may be subject to change. Kuflink does not offer any financial or tax advice in relation to the investment opportunities that it promotes. Please read our risk statement for full details.

**The Help to Buy ISA closed to new accounts at midnight on 30 November 2019

We spoke to Antonio, our IT apprentice to get his take on apprenticeships and how it has helped him learn and grow within his role at Kuflink.