Money Saving Expert UK ISA

Compound Interest Formula:

\[ FV = P \times (1 + \frac{r}{n})^{(n \times t)} \]

Principal (P):

GBP

Annual Interest Rate (r):

Compounding Periods Per Year (n):

Time (t):

years

Future Value (FV):

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1. What is the Money Saving Expert UK ISA?

The Money Saving Expert UK ISA is a tax-free savings account that allows UK residents to save money without paying tax on the interest earned. As of September 2025, some ISAs offer up to 4.38% interest rate according to Money Saving Expert recommendations.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

\[ FV = P \times (1 + \frac{r}{n})^{(n \times t)} \]

Where:

\( FV \) — Future Value (GBP)
\( P \) — Principal amount (GBP)
\( r \) — Annual interest rate (decimal)
\( n \) — Compounding periods per year
\( t \) — Time in years

Explanation: This formula calculates how much your ISA savings will grow over time with compound interest, accounting for how frequently the interest is compounded.

3. Importance of ISA Savings

Details: ISAs provide a tax-efficient way to save and invest money in the UK. The tax-free status means you keep all the interest earned, which can significantly boost your savings over time compared to taxable accounts.

4. Using the Calculator

Tips: Enter your initial deposit in GBP, the annual interest rate (as a percentage), how many times per year interest is compounded, and the number of years you plan to save. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the current ISA allowance?
A: As of 2025, the annual ISA allowance is £20,000 per tax year, but check current regulations as this may change.

Q2: Are all ISAs the same?
A: No, there are different types including Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs, and Lifetime ISAs, each with different features and rules.

Q3: Can I withdraw money from my ISA?
A: Yes, but withdrawal rules vary by ISA type. Some may have penalties or affect your annual allowance if you withdraw and redeposit.

Q4: Is my money safe in an ISA?
A: Cash ISAs are protected by the FSCS up to £85,000 per person per financial institution. Investment ISAs carry market risk.

Q5: Can I have multiple ISAs?
A: You can have multiple ISAs but you can only pay into one of each type in each tax year, and your total contributions cannot exceed the annual allowance.