ISAs - what's changing?

Are my ISA savings protected?

Our cash ISAs and other savings are protected by the Financial Services Compensation Scheme (FSCS) up to £120,000 per eligible person, per financial institution.

What's the difference between an ISA and a standard savings account?

A cash ISA lets you earn interest tax-free. With other types of savings, you can earn interest tax-free up to a threshold, known as a Personal Savings Allowance. If your savings earn more than this each year, you pay tax on the interest you earn above your allowance. 

If you want help to understand the differences between ISAs and savings accounts, then talk to us. Our friendly teams talk savings all day and can help you feel more confident about how your money works for you. 

Tax-free refers to the contractual rate of interest payable, where interest is exempt from income tax. The tax information provided is based on the current law and HM Revenue & Customs practice, both of which may change. Your eligible deposits with Newcastle Building Society are protected up to a total of £120,000 by the Financial Services Compensation Scheme, the UK's deposit protection scheme. This limit is applied to the total of any deposits you have with Newcastle Building Society and Manchester Building Society (as a trading name of Newcastle Building Society). Any deposits you hold above the £120,000 limit are unlikely to be covered.

What's changing with ISAs?

Right now, nothing has changed about how you save into a cash ISA. But the current UK Government has announced changes to ISA rules from 2027. Here's a simple guide:

Today, anyone over 18 and a UK resident can save up to £20,000 a year, tax-free in ISAs.

• From 6 April 2027, if you're under 65, the amount you can put into a cash ISA each year would be capped at £12,000.
• If you use your full £12,000 cash ISA allowance, you could put up to £8,000 into a stocks and shares ISA, where it would stay tax-free. Alternatively, you could put your full £20,000 allowance in a stocks and shares ISA, if this works for you.
• If you're over 65 (or will be in 2027), you will still be able to save up to £20,000 a year tax-free in a cash ISA.

The changes are scheduled for April 2027. We're here to help you understand how things could work when the changes go ahead.

What does this mean for me right now?

For now, you can continue to save into your cash ISA as you do today.

Some useful reminders:

• You can save up to £20,000 in ISAs each tax year and the interest you earn stays tax-free for as long as the money remains in an ISA.
• You can have more than one kind of ISA. The £20,000 allowance applies to your total ISA savings across the tax year.
• You can choose different types of ISAs depending on how much you want to save, how you want to save it and when you want to access your money.
• The tax year runs from 6 April to 5 April each year.

Tax-free means you won't pay tax on any interest earned while your money remains in an ISA. If you withdraw from your ISA, your money may lose its tax-free status. If you're unclear, or just want things explained in a straightforward way, we're always happy to talk things through.

What is a stocks and shares ISA?

A stocks and shares ISA allows you to invest in a wide range of shares, funds, investment trusts and bonds. Although there is no fixed term, a stocks and shares ISA may be suitable to savers thinking of a long-term investment of ideally five years or more.

If you want to know more, we can introduce you to a Newcastle Financial Adviser in your local branch. They can discuss stocks and shares ISAs with you in more detail, with a no-obligation conversation.