ISA season is here: how to make your money work harder - tax-free

ISA season is here: how to make your money work harder - tax-free

As the tax year clock ticks towards 5 April, many savers are taking a fresh look at a tried-and-tested way to grow their money more efficiently: the Individual Savings Account, better known as the ISA.

An ISA shelters your savings or investments from tax on interest, dividends and capital gains, with each new tax year bringing a new allowance. For adults, the maximum you can put into ISAs is £20,000 per tax year and that limit resets when the new tax year starts on 6 April.

Whether you’re saving for a rainy day or planning a bigger goal such as home improvements, ISAs can help you keep more of what you earn.

Up to £20,000 a year, sheltered from tax

The ISA allowance is one of the most generous tax breaks available to UK savers and investors. You can put in up to £20,000 every tax year (6 April to 5 April) - either all into one ISA, or split across multiple ISAs, provided you stay within the overall limit.

Its ‘use it or lose it’ structure is what makes this time of year such a focal point. Any unused allowance doesn’t roll over. Once 5 April passes, that year’s opportunity is gone and you begin again with a fresh allowance on 6 April.

Easy to open and tax-efficient

ISAs are built to make tax-efficient saving straightforward. In a standard savings account, interest may count towards your Personal Savings Allowance (PSA) and, depending on your tax band and the amount of interest you earn, some of that interest could be taxed.

By contrast, the interest earned in an ISA is tax-free and, crucially, it does not count towards the PSA.

Put simply: if you’re comparing like-for-like interest rates, an ISA can help your savings grow faster than a taxed savings account because you’re not sharing your returns with HMRC.

One ISA ‘wrapper’, lots of choice

ISAs are not one product - they are a tax ‘wrapper’ that can hold different types of saving or investing. The UK has four main ISA types:

• Cash ISA - a savings account where interest is tax-free
• Stocks and Shares ISA - investments such as funds, shares and bonds
• Innovative Finance ISA - certain peer-to-peer style investments
• Lifetime ISA - designed for first-home buyers and retirement, with additional rules and limits

This means you can align your ISA strategy to your goals and your attitude to risk.

• If certainty is the priority, many people opt for a Cash ISA, which works much like a traditional savings account but with tax-free interest.
• If you’re investing for the longer term and can accept that values can rise and fall, a Stocks and Shares ISA offers broader investment choice - though returns are not guaranteed.

At Progressive Building Society, the focus is on Cash ISAs, helping savers access tax-free growth through straightforward savings products.

Progressive’s Cash ISA range: options for different saving styles

Within Cash ISAs, flexibility can look very different from one product to the next, which is why it’s worth matching the account to how you plan to save.

Progressive’s product range includes, for example:

• Cash ISA (variable rate)
• Double Access Cash ISA (limited withdrawals)
• Fixed Rate ISA Bonds (with terms such as one, two, three or five years)

It means savers aren’t forced into a one-size-fits-all approach. Some want access; others are happy to lock money away for a defined term in return for a fixed rate (subject to product terms and conditions).

Topping up your existing Progressive ISA Bonds: what to know at the new tax year

One of the most common questions at this time of year is whether you need to open a brand-new ISA to use your new allowance.

If you already hold a Progressive ISA Bond, you may be able to add new tax year subscriptions into that existing account - which can be a convenient way to keep your tax-free savings in one place, without starting from scratch (subject to the account’s rules and any product-specific limits).

The Society will only accept subscriptions into one Progressive Cash ISA product in the same tax year, while still allowing you to hold (and subscribe to) Cash ISAs with other providers - as long as your total subscriptions across all ISAs stay within the £20,000 overall allowance.

A simple checklist for adding a new tax year subscription

When the new tax year begins on 6 April, customers who want to pay into their existing Progressive ISA Bond should consider:

• Timing: make sure the payment is treated as a new tax year subscription (from 6 April onwards).
• Allowance: keep total ISA subscriptions across all providers within £20,000 for the tax year.
• Progressive rule: subscribe to only one Progressive Cash ISA product in that tax year.
• Funding method and minimums: follow the bond’s terms on lodgements and any minimum deposit requirements.

If you’re unsure whether your existing ISA Bond accepts additional subscriptions (or how to make one), Progressive’s savings support hub is designed for existing customers who need help managing their account.

The bottom line

ISAs remain one of the most powerful, practical tools for UK savers.

They offer:

• a clear annual allowance (up to £20,000 per tax year)
• tax-free growth, which can help savings build faster than taxed accounts
• a range of options, from cash savings to longer-term investing
• and, for existing Progressive customers, the ability in many cases to continue using the ISA you already have by adding new tax year subscriptions to an existing Progressive ISA Bond, in line with product rules.

Information correct at time of writing. Rates, products and eligibility criteria can change and account terms apply.

ENDS