What is an ISA?
An ISA is an Individual Savings Account where you do not pay tax on the interest earned.
What’s more, ISAs are NOT counted as part of your Personal Savings Allowance (PSA).
The Personal Savings Allowance, is the amount of interest earned on your savings before having to pay tax. Your allowance will depend on whether you are a basic, higher or additional-rate taxpayer.
There are 4 types of ISA:
- Cash ISA
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Stocks and Shares ISA
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Innovative Finance ISA
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Lifetime ISA
At Progressive, we offer the Cash ISA.
Who can open an ISA?
If you’re a UK resident and 18 years of age or over, you can open an ISA.
What is the ISA allowance?
You will receive a new ISA allowance each tax year, running from 6 April to 5 April the following year. This is the maximum amount you can save into any ISA.
For this year the ISA allowance is £20,000.
If you don’t use it, you’ll lose it, as the allowance cannot run into the next tax year.
Other benefits
We understand that life is rarely uneventful and there may be times you’ll need to dip into your savings. ISA flexibility gives you just that.
You can withdraw money from your Cash ISA (subject to the terms and conditions of your account) and replace it within the same tax year, without it affecting your annual tax allowance. For example, if you had invested the full £20,000 in one tax year, you would be able to withdraw £5,000 and deposit another £5,000 before the year is up.
Replacement money MUST be paid back into your account within the same tax year or your allowance will be affected.
At Progressive, we offer ISA flexibility on our:
- Cash ISA Account
- 1 Year Double Access Cash ISA Account
Types of ISA
There are four types of ISA on the market, and without doubt the most popular is the Cash ISA. At Progressive we focus solely on Cash ISAs but below, you can find out more about the various ISAs available.
A savings account where you don’t pay tax on the interest you earn.
View our range of cash ISAs.
A Stocks and Shares ISA is a tax-efficient way to invest in a wide range of stocks, shares, funds, bonds and gilts.
Innovative Finance ISAs allow interest and gains from peer-to-peer loans to qualify for tax advantages.
Lifetime ISAs allow you to save up to the Lifetime ISA allowance each tax year and receive a government bonus of 25% of what you have saved. You can use some or all of the money to buy your first home or keep it until you are 60.
Please note, Progressive does not offer Stocks and Shares ISA, Innovative Finance ISA or Lifetime ISA.
Can I fund more than one ISA in a tax year?
You can make subscriptions to multiple ISAs of the same type in a tax year, except for Lifetime ISAs. Investors with a Lifetime ISA (LISA) are restricted to subscribing to one LISA per tax year.
The maximum combined amount you can have across all types of ISA each tax year is known as the ISA Allowance. All subscriptions you make to ISAs in a tax year must remain within the overall ISA Allowance limit.
At Progressive, we can only accept subscriptions to one Cash ISA product in the same tax year. However, you may subscribe to a Cash ISA with Progressive and to other Cash ISAs held with other ISA providers in the same tax year. All subscriptions must remain within the overall ISA Allowance limit.
Transferring ISAs
Did you know you can transfer your ISA from one provider to another at any time?
You can transfer some or all of the funds in your ISA. However, if you are transferring part of your Progressive Cash ISA to another ISA provider, the amount in your account representing current tax year subscriptions can only be transferred in full;
You can also switch money from one type of ISA to another, for example, you can move money from a Cash ISA to a Stocks and Shares ISA. Not all ISA providers accept transfers however, so it’s always worth checking with the provider you’re hoping to transfer to.
At Progressive we can take you through the transfer process so call in and speak to us today.
Will transferring money affect my tax-free status?
Your tax-free status won’t be affected as long as you follow the correct process. Don’t withdraw the money from your ISA yourself, instead, simply contact your chosen ISA provider, complete a transfer form and they will organise the transfer for you.
At Progressive we only accept the transfer of your Cash ISA from another provider into the following Progressive Cash ISA accounts:
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Cash ISA (Issues 5 - 6)
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Fixed and Variable Rate ISA Bonds
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1 Year Double Access Cash ISA
You may transfer your existing Progressive Cash ISA to another ISA provider subject to the specific account terms and conditions. Your new ISA provider will ask you to complete a transfer form and they will send it to us to start the transfer process.
For further information please contact your local branch.
What happens if an ISA account holder passes away?
It’s not something we like to think about, but should the worst happen, there are some things you’ll need to know.
If you are the surviving spouse or civil partner of the person who has passed away, you can inherit an additional ISA allowance. This allowance is known as an Additional Permitted Subscription (APS) or inherited ISA allowance.
This means that you will inherit the deceased’s ISA allowance, but not necessarily the balance of the ISA account. The allowance is available for 3 years after the date of death or 180 days after the administration of the Estate has been completed, whichever is longer.
If your spouse or civil partner died on or after 6 April 2018, your inherited ISA allowance will be either:
- The value of your partner’s ISA at time of passing or
- The value of the ISA at the point it ceases to be a Continuing ISA, whichever is the higher.
If your spouse or civil partner passed away between 3 December 2014 and 5 April 2018, your inherited ISA allowance will be the value of their ISA at the date of their death.
Please note at Progressive we can only accept an inherited ISA allowance from a surviving spouse or civil partner where the deceased ISA holder was an existing Member and held their Cash ISA with the Society.
Unfortunately, we cannot accept the transfer of an inherited ISA allowance from another ISA manager. The surviving spouse or civil partner may only make a one-off permitted subscription to their Progressive Cash ISA and we are unable to accept multiple subscriptions.
It’s worth noting, if the surviving spouse or civil partner does not subscribe the full amount of their inherited ISA allowance then any unused balance will be lost.