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Don’t snooze on your ISA allowance – make the most of your tax-free savings with Cushon

Don’t snooze on your ISA allowance – make the most of your tax-free savings with Cushon alt

ISAs are popular saving products as they provide a tax-free wrapper for your money, meaning when you withdraw it’s all tax free (including any growth you’ve made on the money). ISAs run with the tax year, so allowances reset from 6th April 2022.

ISA allowances can’t be carried forward, so you’ll lose any unused allowance.

Maximising your ISA allowance with Cushon and deadlines for processing:

  1. Direct bank transfer – Use your bank mobile/web app to send money to Cushon using your pots U-number reference. Be aware fraud checks can delay these processing. Cushon suggest actioning these by 4th April, it’s the date the money arrives at Cushon which counts, not when you sent the money.

  2. Direct Debit lump sum payment – These take longer to process, however the day you instruct Cushon to take the money is what counts - potentially a good option for anyone deciding to instruct a deposit at 11:58pm on April 5th but the money will take a few days to appear!

Download the Cushon App for a simple way to access and control your money.

If you have access to Cushon through your employer but don’t have an account, ensure to sign up through your employer’s site. Once you have an account, you can action the above either through the web or Cushon App, but initial sign ups must be linked to your employer.

If you wish to benefit using a salary deduction you must sign up for a Cushon account in February to allow for a March deduction, anything later will fall into the next tax year.

What are the allowances?

  • ISA: £20,000

  • Lifetime ISA: £4,000 (included in the £20,000 ISA allowance)

  • Junior ISA: £9,000 (per child)

Use your allowance on the ISA that’s best for you

ISA: Want a simple, tax-free account? Make the most of your £20,000 annual allowance with an ISA where you can setup as many separate ‘pots’ as you like within your single Cushon ISA. You can choose to hold your money in cash, invest in a readymade portfolio or select from over 1,000 different funds – or have a mixture.

Junior ISA: Want to set some money aside for the kids? Save up to £9,000 per year for your children. Other family and friends can contribute into once open. They’ll be granted access when they turn 18. You can transfer a Child Trust Fund into a Junior ISA.

Lifetime ISA: Are you looking to become a first-time home buyer? Build a deposit fast with a government bonus of 25% on savings up to £4,000 per year.

General Investment Account: Not an ISA, but if you’ve maxed out your ISA allowance for the year, no problem, a General Investment Account (GIA) is available. There’s no limit to how much you can save or when you can withdraw. With a GIA you may have to pay tax on any income or capital gains you earn from your investments.

Get your government bonus from a LISA

The Lifetime ISA (LISA) is a tax-free savings account to help first time home buyers aged 18-39 get on the property ladder. Save money into a LISA and the government will give you a 25% bonus on the money you put in - that's a bonus of up to £1,000 a year! Any savings in a LISA can also be used for retirement. While you are contributing to a LISA you’ll still receive the 25% government bonus up to age 50.

You can withdraw your money without penalty if you’re using it to buy your first home under £450k and you’ve had the account for at least 12 months. If you’re saving for retirement, you can take out your money once you’ve reached the age of 60.

If you withdraw your money before you hit age 60 and it’s not to buy your first home, the government will apply a withdrawal fee of 25% - but only on the amount withdrawn.

Consolidate your savings

Do you have other ISAs? It can be helpful to have your savings in one place. Whilst topping up your Cushon ISA why not transfer others over at the same time. With Cushon, you can benefit from our free investment monitoring service – CushonMe – to help keep your investments on track. Get all your ISAs in one place with our quick and easy transfer process. Transferring old ISAs between providers has no impact on this year's allowance.

This checklist is for information only and should not be taken as personal advice. If you’re unsure whether an investment or savings product is right for you, please seek advice. Also please remember, as with all investments, they can go down as well as up, and you may get back less than you put in.