While increases to income tax and national insurance were ruled out in the Labour manifesto, changes to capital gains tax, pensions tax relief and inheritance tax are all apparently being considered.  

Many savers and investors are therefore looking at what action they can take now to ensure that they’ve made the most tax-efficient decisions with their money.

While this article is intended to be helpful, it is not advice. Please be aware that with investing comes risk, and there is a chance that you may get back less than you put in. Remember that the tax benefits of Individual Savings Accounts (ISAs) are subject to change, and will depend on your individual circumstances.

ISAs could become more valuable than ever

ISAs are one of the most simple and accessible ways to shelter your money from tax. Any income or growth on savings and investments held in an ISA is tax-free, and the less tax you pay, the higher your returns effectively are.

Most people can shelter up to £20,000 each tax year in ISAs, and by using the allowance every year you can build up a significant pot of tax-efficient savings and investments.

ISAs with impact

Triodos ISAs can offer financial returns whilst also providing positive impact. Our range of ethical investment products can be used to power renewable energy, community projects and sustainable farming. Find out more about projects we’ve funded here.

Unlike some other banks which offer sustainable or ethical ISAs, our funds are truly green. The money entrusted to us by our customers will never fund fossil fuels, arms or unsustainable agriculture.  

Every organisation we lend to or invest in is published on our website - so you know exactly where your money is going.

Whether you want to start saving with a cash ISA, open a Stocks and Shares ISA or directly invest in one of the Triodos sustainable funds – you can be confident that we will only invest to support positive global change.

Here are some key points on how ISAs work:

1. You can save or invest up to £20,000 per tax year

Annually, you can deposit up to £20,000 per tax year without paying income or capital gains taxes on the income generated by the investment. Watch out though, if you don’t use your annual allowance, you will lose it for that tax year and any remaining allowance will not be carried over. Each year the allowance resets to £20,000 again.

2. You can have more than one ISA
 

There are a number of ISA options available. Triodos Bank offers a Stocks & Shares ISA, Cash ISA and Innovative Finance ISA. Cash ISAs are typically best for savings you might need to access in the short-term, but if you can take a longer term view and are comfortable to take some risk, investments can provide higher returns. You can split your allowance however you like between these ISAs, as long as you don’t go above the £20,000 annual limit.

3. ISAs can reflect your values
 

Similarly to everyday banking, ISAs and investments have the power to do good or harm. What do you want your hard-earned cash to fund? Chances are your current bank invests in fossil fuels, intensive agriculture and even arms. If you want your money to have impact, you might want to consider banking with Triodos.

Find out how to have a positive impact with your ISA here. 

4. It’s easy to transfer ISAs

You can transfer existing ISAs to another provider, and even to a different type of ISA if you wish to. For example, you could transfer your Cash ISA to a Stocks and Shares ISA with a different provider. If you already have ISAs with a few different providers, you may find it easier to manage them by transferring them all to one company.

What’s more, for a limited time, you can get a £50 Ethical Superstore voucher if you transfer at least £3,000 to one or more eligible Triodos Bank ISAs by 30 November 2024. 

Find out how to transfer your ISAs to Triodos here.

Please remember that while this article is intended to be helpful, it is not advice. If after reading this information, you're still not sure, it's worth considering financial advice.