Individual Savings Account (ISA) Allowance Changes for 2023/24
What is an ISA?
An Individual Savings Account (ISA) is a UK government-approved savings account that allows individuals to save tax-free up to a certain amount each tax year.
Changes to ISA Allowances in 2023/24
The government has announced changes to ISA allowances for the 2023/24 tax year, which begins on April 6, 2023.
The annual ISA subscription limit will increase from £20,000 to £21,000.
Within the overall ISA limit, the Junior ISA (JISA) limit will rise from £9,000 to £9,264.
The Lifetime ISA (LISA) limit will remain unchanged at £4,000.
What do these changes mean for you?
If you are an ISA saver, these changes mean that you will be able to save more money tax-free in the 2023/24 tax year.
For example, if you have been contributing the maximum £20,000 to your ISA each year, you will be able to contribute £21,000 in the 2023/24 tax year.
If you are saving for your child's future, you will be able to contribute more money to their JISA in the 2023/24 tax year.
If you are saving for your first home, you will be able to contribute the same amount of money to your LISA in the 2023/24 tax year.
How to make the most of your ISA allowance?
To make the most of your ISA allowance, you should consider the following tips:
- Contribute as much as you can afford to your ISA each year.
- If you have multiple ISAs, make sure that you are using the most tax-efficient ISAs first.
- Consider investing your ISA savings in a stocks and shares ISA to potentially earn a higher return on your investment.
Conclusion
The changes to ISA allowances in 2023/24 are a positive step for savers. These changes will allow individuals to save more money tax-free and help them to achieve their financial goals.
