What is an ISA?
An ISA (Individual savings account) is a tax allowance set by the government to encourage savings.
Every individual in the UK over the age of 18 has a set amount of savings they save per tax year with any liability to tax. This ISA allowance is set by the government and can go into a Cash ISA and or Stocks & Shares ISA. You can also use the cash and stocks and shares allowance separately.
If you are under 18 there is a new individual savings accounts for children, known as 'Junior ISAs, are now available. The accounts offer parents a tax-free way to save for children who don't have a Child Trust Fund.
Anybody can put money into a Junior ISA. The total limit for payments into Junior ISA again is set by the government each year. There will be no tax to pay on any interest or gains.
The money in a Junior ISA belongs to the child, but they can not take the money out until they are 18. They can then decide what they want to do with it.If the child chooses not to take the money out, the Junior ISA will automatically become an ISA.