The new year is often an excellent time to get your finances in order, with many having resolutions to get on top of their personal financial affairs. You can start the new year afresh and get to grips with your money.
We are also coming off the back of one of the most expensive months of the year. Many get swept up in December’s festivities and spend more than usual on gifts, parties, and food. So, as the dust settles on another year, many of us may feel a financial hangover and need to sort out our finances.
Part of this includes looking at existing savings accounts and seeing where to place your money better. To properly “make your money work for you”, you need to know where it is placed and what you are getting back.
This is why we have compiled a short guide about ISAs in 2024, to help you decide whether an ISA is for you and, if so, which ISA is the perfect fit.
Maximise your options: Compare and apply for loans below with LoanTube
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Loan Amount
£4000 -
£20000
Norwich Trust
Loan Term
1 -
10 years
4.8/5
Representative APR
31.90%
Minimum Age
21 Years
Representative Example: £12,000 over 66 months, 31.9% APR fixed. Monthly payment £358.22 Annual interest rate 28.01% fixed. Interest payable £11,642.52. Total repayable £23,642.52.
4.8/5
Norwich Trust
Loan Amount
£4000 -
£20000
Loan Term
1 -
10 years
Representative APR
31.90%
Minimum Age
21 Years
Minimum Income
£2000 per month
Representative Example: £12,000 over 66 months, 31.9% APR fixed. Monthly payment £358.22 Annual interest rate 28.01% fixed. Interest payable £11,642.52. Total repayable £23,642.52.
Loan Amount
£5000 -
£100000
Evolution Money Loans
Loan Term
1 -
20 years
4.5/5
Representative APR
28.96%
Minimum Age
18 years
Representative Example: Loan Amount: £20950.00, Loan Term: 85 Months, Interest Rate: 23.00% PA Variable. Monthly Repayments: £537.44. Total Amount Repayable: £45,682.15. This example includes a Product Fee of £2,095.00 (10% of the loan amount) and a Lending Fee of £714.00
4.5/5
Evolution Money Loans
Loan Amount
£5000 -
£100000
Loan Term
1 -
20 years
Representative APR
28.96%
Minimum Age
18 years
Minimum Income
Not mentioned
Representative Example: Loan Amount: £20950.00, Loan Term: 85 Months, Interest Rate: 23.00% PA Variable. Monthly Repayments: £537.44. Total Amount Repayable: £45,682.15. This example includes a Product Fee of £2,095.00 (10% of the loan amount) and a Lending Fee of £714.00
Loan Amount
£1000 -
£10000
1Plus1 Guarantor Loans
Loan Term
1 -
5 years
4.4/5
Representative APR
39.90%
Minimum Age
18 years
Representative Example: Borrowing £3000 over 36 months with a representative APR of 39.9% (variable),the amount payable would be £134.21 a month,with a total cost of credit of £1831.56 and a total amount payable of £4831.56.
4.4/5
1Plus1 Guarantor Loans
Loan Amount
£1000 -
£10000
Loan Term
1 -
5 years
Representative APR
39.90%
Minimum Age
18 years
Minimum Income
Not mentioned
Representative Example: Borrowing £3000 over 36 months with a representative APR of 39.9% (variable),the amount payable would be £134.21 a month,with a total cost of credit of £1831.56 and a total amount payable of £4831.56.
What Is An ISA?
- An ISA, or an individual savings account, allows people to save money and avoid paying tax on their interest, regardless of their income. The scheme was introduced in 1999 to encourage people to save money.
- There is a limit on how much individuals can save tax-free in any given year. For instance, for 2023/24, the ISA limit was £20,000 and will remain the same for the financial year 2024/25. The all-important date for savers to get as much tax-free interest as possible is 5th April 2024, when the financial tax year ends.
- If you do not use up the ISA allowance, you cannot carry it over into a new financial year, so it is worth saving as much as you can between now and April.
- Individuals can only open one Cash ISA per year, one stock and shares ISA per year, and one IFISA per year. You can open these accounts simultaneously and invest up to £20,000 per year spread over the three.
What are the Different Type of ISAs
There are four types of ISA:
- Cash ISA
- Stocks and Shares ISA
- Innovative Finance ISA (IFISA)
- Lifetime ISA
Cash ISA
The most common of these ISAs is the Cash ISA. This is a standard savings account, but you won’t pay tax on any interest you earn. To make matters a little more confusing, there are more sub-categories within this category. Cash ISAs can be:
- Easy Access – This lets you access your money whenever you need it without penalty.
- Regular Saver – Gives you a fixed interest rate if you make regular monthly deposits.
- Junior – Allows you to save a maximum of £4,368 a year, tax-free, for your child if they are under 18 and living in the UK. This becomes an adult ISA when they turn 18.
- Notice – Often gives you a better interest rate but requires you to tell your bank when you want to withdraw your money in advance.
- Fixed Term – This keeps your money for a whole term, usually between one and five years. Also gives you a fixed interest rate.
Stocks and Shares ISAs
- The Stocks and Shares ISAs allow savers to invest money into the stock market, meaning you could lose money. This ISA would usually be managed by a provider, due to needing to track the performance of stock markets, like the FTSE 100.
- Savers have to trust their bank to invest their money wisely, but, as with any shares, prices can increase and decrease over the year, and you are not guaranteed a return on investment. Having said this, the reward is potentially also greater.
Innovative Finance ISA (IFISA)
- This ISA is relatively new to the market, launched in 2016. It is one to look out for in 2024, as it is increasing in popularity.
- This is the only ISA that allows savers to invest money without saving cash or investing in the stock market.
- This ISA is based around peer-to-peer lending (P2P). The saver’s money is borrowed by either a business or an individual looking for a better interest rate, cutting out the middleman of the bank.
- The interest rate you earn with this ISA is based on the borrower’s credit history. If they have a good credit history, you will make less interest. If they have a bad credit history, you can charge more interest.
- There is a certain level of risk, however. If the business goes into administration or the individual defaults on the loan, you may be left with less money than you started.
- With this type of ISA, it is crucial to remember that you can only open one new innovative finance ISA with one single provider each tax year.
Lifetime ISA
- The Lifetime ISA is also relatively new and is becoming popular among savers due to its returns. Individuals can save up to £4,000 a year into this ISA as a lump sum or in instalments. The Government will then add a 25% bonus on top of this sum.
- If you save £1,000 throughout the year, the Government will add £250, leaving you with £1,250. And this amount is before any interest.
- The bonus is paid monthly, calculated month-by-month, depending on what is in the account.
Who Can Open an ISA?
To open an ISA, you must be:
- 16 or over for a cash ISA
- 18 or over for stocks and shares or innovative finance ISA
- 18 or over but under 40 for a Lifetime ISA
- A resident in the UK
- A Crown servant (for example, diplomatic or overseas civil service) or their spouse or civil partner if you do not live in the UK
You also cannot hold an ISA with or on behalf of someone else unless it is a junior ISA for a child living in the UK under 18.
What Were the ISA Allowances for 2023/24?
- The tax-free allowance for 2023/24 did not increase from the previous year. The Government set it at £20,000.
- If you have more than one different ISA, the value of the accounts combined must not exceed £20,000.
- The Junior ISA in 2020/21 from £4,368 to £9,000 to fall in line with inflation, but has remained the same since. Hence, even for 2023/24, the Junior ISA is capped at £9,000.
- The deadline to utilise the ISA allowances ends at midnight on 5th April 2024, when the financial year ends. If savers miss this deadline, they will have missed the opportunity to benefit from the tax-free allowance fully.
When is the New ISA Allowance Announce for 2024/25?
- At the end of each tax year, the Government reset the ISA allowance. This is why the end of each tax year is also known as the ISA deadline.
- The UK’s tax year runs from 6th April to midnight on 5th April. However, in the past, we were usually told what the allowance would be before the tax year’s end.
- There is currently no date set for the announcement of the ISA allowance for 2024/25; however, the allowance is anticipated to remain unchanged.
Is an ISA Worth it?
Cash ISAs have taken a hit in the past few years, with interest rates slowing and falling below inflation. They have also been hit by introducing a Personal Savings Allowance, which allows savers to earn tax-free bonuses without needing an ISA. For example:
- If you are a basic rate taxpayer, your personal savings allowance is £1,000
- If you are a higher-rate taxpayer, your personal savings allowance is £500
- Many cash ISAs give you lower interest than the current inflation rate, which is 1.7%. This means that your money is potentially shrinking.
- Having said this, whether to put your money into an ISA in 2024/25 is all dependent on your circumstances. There are positives about the tax-free bonus offered. Many people are not experienced investors and want a simple way to earn a little bit of money.
- In addition, in a financial market where the mis-selling of financial products is growing, savings in an ISA are protected.
- Where you put your savings is dependent on your risk appetite. If you are willing to risk your investment for more reward, then a Cash ISA may not be for you. If, however, you want a guaranteed tax-free bonus at the cost of a lower interest rate, then Cash ISAs may be perfect.
How Can LoanTube Help You?
- Here at LoanTube, our website can offer you a quick and easy comparison service at no cost to those who need a loan. We understand that money can sometimes run short and want to help those who need a helping hand.
- The application process is quick and easy, and we use a Soft Credit Check, which means your credit score will not be harmed.
- Whether it is to tide you over with a short-term loan or consolidate any existing debts, our comparison tool can compare actual APRs and interest rates across several different lenders we work with.
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