Savings
ISAs put simply
What is an ISA?
An ISA (or Individual Savings Account) is a tax-efficient way to save.
You can invest in four separate ISAs each year: a cash ISA (from age 16), a Stocks & Shares ISA (from aged 18), Innovative Finance ISA (from aged 18) and a Lifetime ISA (from aged 18). A Lifetime ISA can only be opened between the ages of 18 and 40 and once opened you can invest into the account up to age 50. You can invest in any combination of the four types of ISA in one tax year up to your total annual ISA allowance limit which is £20,000 for the 2021/22 tax year, however the annual contribution limit into a Lifetime ISA is £4,000.
By choosing a Cash ISA you will benefit from tax-free interest. Although Stocks & Shares ISAs are tax efficient they are not completely tax-free. These ISAs are best suited for money that you can leave untouched for at least 5 years or more.
An Innovative Finance ISA allows interest and gains from peer to peer loans to qualify for tax advantages.
A Lifetime ISA can be used to save for a deposit for your first home or your retirement (where you could be eligible to receive a bonus based on your savings).
Chelsea Building Society only offers Cash ISAs.
Please note:
If you fail to invest in your Cash ISA in a single tax year, under HM Revenue & Customs rules you will be required to complete a declaration form before you can invest further.
ISA options
Cash ISA
A Cash ISA is a tax-free savings account. The benefit of the tax treatment depends on your individual circumstances and may change in the future. You can start saving with as little as £10 and can pay in up to a maximum of £20,000 in the 2021/2022 tax year. You don't pay any tax on the interest you earn, so every penny is yours to keep. And once your money is in, and stays in, it stays tax free.
- Save up to £20,000 in the 2021/2022 tax year
- Transfer in your savings from existing ISA accounts, either with us or with another provider
- With certain accounts you can get access to your money in the short or medium term, depending on the specific terms and conditions of the account
- Any withdrawals from tax-free accounts will result in a loss of your tax-free allowance, other than transferring to another ISA.
- If your ISA is flexible this means you can replace money withdrawn from your ISA without this affecting your annual allowance, as long as the replacement funds are made in the same tax year in which the withdrawal takes place.
Stocks and Shares ISA
A Stocks & Shares ISA is a tax-efficient way to invest up to £20,000 of your money in the 2021/2022 tax year. The benefit of the tax treatment depends on your individual circumstances and may change in the future.
Please note:
The value of an investment in a Stocks and Shares ISA is not guaranteed and can fall as well as rise so you may get back less than you originally invested. If you're not sure if this type of ISA is right for you, it's best to speak to an Independent Financial Adviser.
Lifetime ISA
A Lifetime ISA is designed to help individuals save for the long-term. Individuals between the ages of 18 to 40 can open a Lifetime ISA and contribute £4,000 in each tax year. The government will then provide a 25% bonus on these contributions at the end of the tax year. This means that where the maximum of £4,000 is saved each tax year, you will receive a £1,000 bonus each year from the government. You can save in a Lifetime ISA and receive a bonus from the age of 18 up to the age of 50. The savings and bonus can be used to purchase your first home or can be withdrawn at retirement when you turn 60.
Innovative Finance ISA
An Innovative Finance ISA allows individuals to use some or all of their annual ISA allowance to lend funds through the Peer to Peer lending market. Peer to Peer lending allows individuals and companies to borrow money directly from lenders.
Please note:
Your capital and interest may be at risk in an Innovative Finance ISA and your investment is not covered under the Financial Services Compensation Scheme. If you’re not sure if this type of ISA is right for you, it’s best to speak to an Independent Financial Adviser.
Limits and allowances
You can invest in four separate ISAs each year: a cash ISA (from age 16), a Stocks & Shares ISA, Innovative Finance ISA and a Lifetime ISA (each from aged 18). You can invest in any combination of the four types of ISA in one tax year up to your total annual ISA allowance limit which is £20,000 for the 2021/22 tax year, however the annual contribution limit into a Lifetime ISA is £4,000.
Chelsea Building Society only offers Cash ISAs.
What if I don't use all my allowance?
As soon as a tax year ends on the 5th April, any allowance for that tax year ends too.
That means if you don't use all your allowance, you'll miss out on using any remaining allowance for that tax year.
Am I eligible?
If you'd like to open a Cash ISA you must be aged 16 and resident in the UK for tax purposes. Alternatively you must be a qualifying crown employee or be married or in a registered civil partnership with a qualified crown employee.
ISA transfers
Can I transfer my allowance?
Although you can only save into one of each type of ISA in each tax year, you're free to move your money around in different ways, as long as the product terms and conditions allow it.
Cancelling your ISA
You can cancel your account if you change your mind within 14 days with no notice or charge. We'll refund your money along with any interest it's earned and you'll be free to open another ISA in the same tax year.
To cancel within 14 days, simply call 0345 166 9219.
If you do not cancel your subscription within the 14 day time period please note you will have subscribed to a Cash ISA for this tax year and you will not be able to open another Cash ISA with us or any other provider in the same tax year.
Help & support
Find out more about how to open accounts, make deposits and access your money.
Your questions answered
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