What is an ISA?

Any individual who is an income tax payer and has some money to save or invest should know about Individual Savings Accounts (ISAs). Available since April 1999, ISAs offer an attractive, tax-free shelter to anyone aged 18 or over (16 or over for cash ISAs).

With standard bank and building society savings accounts taxpayers normally have to pay tax on any interest earned on their money. The tax is deducted from the interest before it is paid out, reducing the amount received. Similarly, tax must be paid on the income and profits made from investments in the stock market, like company shares or unit trusts.