The rundown: ISA changes you need to know for the 2024/25 tax year
Back in November the government announced their Autumn statement, which included a range of changes to ISAs that would come into effect in the 2024/25 tax year.
The main one of course is that from 6th April 2024, you’ll be able to pay into more than one type of ISA (Cash, Stocks and Shares etc.) in the same tax year, offering more options for building wealth and earning interest.
The annual Cash ISA allowance will remain at £20,000 and is shared with any other ISAs you may have.
As part of your £20,000 annual ISA allowance, your annual Lifetime ISA allowance will remain at £4,000, and the government’s 25% bonus on everything you deposit into a Lifetime ISA during the tax year will remain intact.
This will remain available to you until you turn 50, after which time you will no longer be able to pay into the Lifetime ISA or earn the 25% bonus. However, your account will remain open and your savings will still be able to earn interest and investment returns.
Editors note: you’ll incur a 25% penalty should you withdraw money from a Lifetime ISA unless you’re using it to buy your first home worth up to £450,000 or for retirement.
The annual Stocks and Shares ISA allowance also remains the same at £20,000 and again is shared with any other ISAs you may have. But despite both the capital gains allowance and dividend allowance will be halved to £3,000 and £500 respectively, this won’t affect those with all their investments in Stocks & Shares ISAs.
However, those with investments outside of one of these, who also have some ISA allowance left for the remainder of this tax year, could move them into a Stocks & Shares ISA to not only make the most of their annual ISA allowance but also avoid taxes on capital gains or dividends.
