5

How much tax can you save if you invest £5100 in a UK ISA?

Improve this question
3
  • 1
    I'd estimate about £30 a year, but it'll vary depending on your tax band and interest rate. Provide us more details if you want a more accurate number.
    – HexTree
    Jan 27, 2012 at 16:01
  • 1
    May be worth pointing out that once it's in an ISA, it will always have tax free interest on it until you take it out.
    – Robin
    Jan 28, 2012 at 13:17
  • 1
    the Limit is now 15,000
    – Pepone
    Feb 21, 2015 at 22:43

1 Answer 1

Reset to default
5

The short answer is that you'll save precisely the tax that you'd otherwise have paid on the income from the deposit - i.e. 20%, 40% or 45% depending on your tax band.

If you shop around, instant access ISA rates are somewhere between 2%-3% at the moment, so the total interest will be around £100 - £150 making a tax saving of somewhere between £10 and £75 per year depending on your overall income.

However you typically get worse rates of interest within an ISA, which complicates the situation further. You should compare is the rate after tax that you'd get elsewhere with the rate before tax in the ISA, to get a fair assessment of the "savings".

Improve this answer

You must log in to answer this question.