About ISA`s

Individual Savings Accounts (ISAs) are income-tax free, designed by the government to encourage people to save money. In 1999 they replaced Personal Equity Plans (PEPs). With an ISA you don’t pay taxes on any of the interest, dividends, or bonuses. Furthermore, ISA’s invested in stocks and shares have a ten per cent tax credit added to the dividends paid. You will make a “capital gain” if your ISA increases value and no tax will be charged on it. 
Depending on the type, ISA’s can hold different savings and investment products and include one ore more of the following components:
·        Cash (up to ₤3,000 in Savings Accounts, National Savings and Investments)
·        Life Insurance, Stocks and Shares (up to ₤7,000 investment-type life insurance policies, unit trusts, shares, bonds)
A cash ISA allows savers to accrue tax free interest in an ordinary savings account. They are useful to gain interest, avoid taxes and have access to money at a short notice. A shares ISA will invest in the stock market and should be considered a long term investment. Although the gains will not be taxed, this ISA is influenced by the ups and downs of the market. Strict rules apply on how much you can invest in each component and on the overall yearly amount.
ISA’s are available from banks, building societies, National Savings & Investments, investment firms, stockbrokers, insurance firms, and many other financial institutions. Providers offer different combinations of components, to spread your risk.
When choosing an ISA consider the type, amount and term for which you are willing to save. Also know about the fees and level of risk involved. Compare the different products available in the market and for the most complicated ones consult a financial advisor. 
Mini vs. Maxi ISA’s
If your are planning to build some cash for short term expenses and emergencies a mini ISA is a good choice. It is worthwhile having short term savings to avoid borrowing for events such as holidays. You are allowed to open either one maxi or up to three mini ISA’s in one tax year.
There are limits on the amounts you can save. Yearly, Mini ISA’s can save up to ₤3,000 in only one component, but different amounts can be put in each of the ISA’s. Furthermore, if stocks are a component in one of your minis, you might be allowed to invest up to ₤4,000. The sum of the amounts in all of your minis can’t be higher than ₤7,000.
 If you choose to invest in a maxi ISA, you can invest in up to three components, being stocks and shares a required field. It allows you to invest a maximum of ₤7,000 into shares; it can also be broken down to allow up to  ₤3,000 in other components and ₤1,000 into insurance. Bare in mind that once you reach the savings limit you cannot keep adding to your ISA even if you withdraw.
Stakeholder ISA
A Stakeholder ISA, which recently replaced CAT (Charges, Access and Terms) – standards accounts, is supposed to ensure the reliability of the provider. They conform with guidelines on fair charges and terms set by the government. However, this does not guarantee the ISA’s performance and it does not mean that the government is recommending such product or provider. Nonetheless, Stakeholder ISA’s can be a useful benchmark to use when comparing similar products.