Please note: Chip can't provide financial advice, so you may want to seek guidance from a qualified professional if you are unsure or have detailed questions about investing. Capital is at risk.
What is an ISA?
ISA stands for Individual Savings Account, it is a tax-efficient account, or a ‘tax wrapper’ for a savings or investments account, which means you don’t pay any tax on any returns on money held in an ISA.
There are four kinds of ISAs (see ‘How many ISAs can I get’ for more on this), Chip is offering access to a stocks and shares ISA, which means you won’t need to pay tax on any returns you earn with your funds.
You can only put a limited amount of money into an ISA every tax year, this is known as your annual ISA allowance. You can read more about ISAs on the official government website: gov.uk/individual-savings-accounts
What is my ISA allowance?
All UK residents over the age of 18 (or 16 for cash ISAs only) currently have an annual £20,000 ISA allowance (for the 2023/24 tax year, ending 5 April 2024).
Any unused allowance doesn't roll over into the following tax year. For example, if you don’t use your full £20,000 this year (2023/24), and only put in £15,000, you can’t carry the remaining £5,000 over to the next tax year and invest £25,000 into an ISA in 2024/25.
EXAMPLE: How your ISA allowance works
You open a stocks and shares ISA in the 2024/2025 tax year and put in your full allowance of £20,000 before April 2025.
The investments perform well* over the following year and increased in value to £21,000 by April 2025. You do not need to pay any tax on those returns.
In the 2025/2026 tax year, you can top up with an additional £20,000.
So now you have;
£20,000 (your initial investment in the 2024/2025 tax year);
+ £1000* (tax-free capital growth);
+ £20,000 (your next investment in the 2025/2026 tax year);
Giving you a total of £41,000 in your ISA.
Any subsequent growth will be tax-free, and you can repeat this process every tax year.
*EXAMPLE ONLY. This example is simply to explain how ISA allowances work with capital growth, in no way are we saying this is an expected cash return you will see from an investment product we list.
- Please consider all the risk/return information carefully before investing.
What are the benefits of an ISA?
The main benefit of an ISA is that the returns are tax-exempt, in essence, you don't pay income tax or capital gains tax (CGT) on gains made within an ISA. If you complete a tax return, you do not need to declare any, income or capital gains from money in an ISA.
How many ISAs can I have? / Does my ISA allowance cover all my ISAs? / Can I have a Stocks and Shares ISA and a cash ISA?
There's no specific limit for how many ISAs you can hold overall. You're welcome to open and deposit into as many ISA types as you would like. You can also open multiple ISAs of the same type. However, please bear in mind that your £20,000 allowance is split across all of your ISAs.
There are four types of ISAs:
Cash ISA
Stocks and Shares ISA (this is the type of ISA we're describing in this article)
Innovative Finance ISA
Lifetime ISA (also known as LISAs)
Example: having multiple ISAs in one tax year, you could save;
£5,000 in a Cash ISA;
£4,000 in a LISA;
£1,000 in an Innovative Finance ISA;
and £10,000 in a Stocks & Shares ISA.
Is the Stocks and Shares ISA a Flexible ISA?
Yes, it is! You can withdraw and redeposit funds as many times as you like within the same tax year without impacting your annual allowance.
If you're replacing money originally deposited in previous years, it needs to come back to your Chip S&S ISA. However, funds you've contributed this tax year offer even more flexibility: you can replace them into any other ISA you hold, whether it's a different type of ISA or one with another provider.
Please note that Chip does not provide tax advice or financial advice, and tax treatment depends on individual circumstances and may be subject to change in the future
Can I transfer my ISA from Chip to another provider?
If you’d like to transfer your ISA to another ISA provider, you will need to contact your new ISA provider to initiate the transfer process.
The new provider will send you their ‘transfer in’ form and give you all the details on how to proceed. All ISA transfers are handled digitally by our ISA manager, Seccl Custody Limited (Seccl), read more about them in our legal details guide.
Your new provider can start the Stocks and Shares transfer by contacting Seccl via email at transfers@seccl.tech, or electronically through their ISA transfer solution provider. If you’d like, you can share this email address with your provider to help them begin the process.
Once your transfer out has been processed, your S&S ISA will be closed, and you won't be able to reopen it or open another with Chip in the future.
Please note, though, that this email address is for providers only and isn’t monitored for customer queries. If you have any questions about your transfer, you can reach out to Chip directly or speak with your new provider.
Seccl can also be found at 20 Manvers St, Bath, BA1 1JW. Please be aware that we are currently unable to accept posted transfer forms. Feel free to contact us with any further Stocks and Shares ISA transfer questions via email at investmentisa.transfers@getchip.uk.
Please note: for any Cash ISA transfer requests, please email cashisa.transfers@getchip.uk.
