Individual Savings Accounts (ISA)

• A type of savings account that can be used to build up a capital lump sum in the hope that there are sufficient monies to repay the capital element of an Interest only loan or mortgage at the end of the agreed term. Under current tax law, the interest or investment return on ISAs is tax-free but the Government has set limits on the amounts that can be put into ISAs.

ISAs are widely available through banks, building societies, insurance companies, and by the post office through National Savings. They can be used as an interest bearing savings account, as a way of investing in stocks and shares or, in some cases, to take out life insurance.