ISA Essentials: Why it pays to use your allowance

Since its launch in 1999, the Individual Savings Account (ISA) has offered British investors a tax-free haven for their savings. Introduced by then-chancellor Gordon Brown, the ISA has saved investors tens of billions in capital gains and income tax. Indeed, this year alone, the tax wrapper is expected to save Britons over £7bn.
But by helping savers, the ISA has started to become a headache for the government. As public sector spending requirements continue to mount, the chancellor is seeking new ways to fill the public purse. Tax allowances and wrappers are an obvious place to look.
And so in last year’s Autumn Statement Jeremy Hunt announced a substantial decrease in the tax-free allowance for capital gains and dividends, making the ISA wrapper an even more important perk for Britain’s investors.
This article aims to help you take advantage of your ISA allowance in the current tax year and beyond. You will learn:
The answers to 10 frequently-asked questions about ISAsHow much ISAs can save you if you use them effectivelyWhy tax changes are making ISAs more important than ever

10 need-to-knows
1. What is an ISA?
An ISA is a tax-free savings account....