Money Matters!

If you’ve been watching the news or scrolling your feed lately, you’ve probably seen talk about ISAs. The government is thinking about changing the rules to make them more flexible and appealing. But if you’ve never looked into them before, the whole thing might feel a bit... confusing. We'll explain what ISAs are, what types there are, how risky they are (or aren’t), and how to use them. Most importantly, we’ll show you how some of these ISAs could work for you and how you can start using them to hit your financial goals. Here’s why ISA’s are such a big deal You don’t pay tax on the money you earn inside an ISA. That means no tax on interest, investment growth, or profits. Each person gets an ISA allowance of tax-free savings each year, which resets every April. You can only open and pay into one of each type of ISA per year (we’ll talk about the different types later). Only UK residents can open and use an ISA. What are the different types? We mentioned earlier that there are different types of ISAs and that’s for a good reason! People save for all kinds of goals, and in different ways. So, these ISA options are designed to give savers more choice, depending on their goals, timelines, and comfort with risk. Let’s break them down one by one. Cash ISA Risk: Low This is the most straightforward type of ISA. You put money in, and the bank or provider pays you interest, just like a regular savings account. The key difference? You don’t pay any tax on the interest you earn. You can put in up to £20,000 per tax year (this limit is called your annual allowance , which just means the maximum you're allowed to add to ISAs in one year without paying tax). This ISA is good if you: Want to grow your money safely Don’t want to risk investing Prefer simple, predictable savings Junior Cash ISA Risk: Low A Junior ISA (sometimes known as a JISA) is for children under 18. A parent or guardian opens it, but anyone can pay in. The money is then locked away until the child turns 18 and then it becomes theirs. You can save up to £9,000 per tax year , and it can be a great way to give your child or grandchild a financial head start. This ISA is good if you: Want to save for a child’s future Want the money to grow safely Don’t want it to be touched early Lifetime ISA (LISA) Risk: Medium This ISA is for people aged 18–39 who are either saving for their first home or for later life. You can save up to £4,000 per tax year , and the government adds a 25% bonus (that’s up to £1,000 a year of free money!) But here’s the catch: you can only take the money for buying your first home, or after you turn 60. Anything else, and you’ll be charged a penalty fee that takes away some of your savings. This ISA is good if you: Are saving for your first house or retirement Don’t need flexibility for your savings Don’t want it to be touched early Stocks & Shares ISA Risk: High Instead of just saving, this ISA lets you invest your money in things like company shares or funds. Over time, this could earn you more than a normal savings account and you won’t pay tax on any money you make from these investments. But because it’s investing, your money isn’t guaranteed. It could go up... or down. This ISA is good if you: Want to try and grow your money long-term Are OK with risk Won’t need the money for several years What Changes Might Be Coming to ISAs? The UK government has been talking about “modernising” ISAs, but none of this is confirmed yet . Here are some of the proposed changes they’re considering: For all ISAs: Letting people open and pay into more than one ISA of the same type each year Encouraging more investment in UK-based companies and funds Making transfers between providers easier and quicker For Lifetime ISAs: Reducing the penalty for early withdrawals Raising the home price cap (currently £450,000) Allowing use for other life events like long-term care or education For Junior ISAs: Increasing the annual limit above £9,000 Letting teens manage their money earlier Creating more flexible access rules for specific situations Again, these changes are not law yet. But they’re worth keeping an eye on if you want to make the most of your savings options. Want to start saving in an ISA that’s perfect for beginners? With Plane Saver’s Instant Access Cash ISA, your savings stay flexible while earning better interest than you would at many high street banks. Plus, your rate is fixed until the end of the tax year , so it won’t drop unexpectedly! Plane Saver Instant Access Cash ISA Rate: 4.25% Fixed AER VS NatWest: 1.40% AER Variable (Notice how NatWest’s Cash ISA says “variable?” That’s their sneaky way of saying they can drop the rate at any time!) Go to our website to learn more: 👉 Cash ISA | Harlowsave Credit Union

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