The bank shared advice for customers who aren’t making the most of the tax-free benefits
Lloyds Bank has shared a reminder to customers with ISA accounts. Individual Savings Accounts (ISA) are frequently favoured by people saving toward a big purchase or looking to invest their funds, as they can benefit from tax-free interest. However, the banking group has highlighted that ISAs could prove valuable for more modest savings targets, too.
In a TikTok post, @Lloydsbank informed customers they could ‘start planning’ to achieve smaller saving ambitions, such as funding a new tattoo, using an ISA. The bank said: “ISAs don’t just have to be for the big goals. Start planning for what you’re saving for and give it a name.”
Lloyds Bank also provided an example in the video accompanying the post. The video featured an interview with a man who wanted to save money for a new tattoo. He told viewers: “Winter me has one job, prepping for summer me, because summer me will be wearing short shorts, and I’ve got a plan for that.
“People usually think ISAs are for big future things, but mine, mine was for a tattoo, and because ISAs can be for saving and investing, I used the Lloyds ISA finder to help guide me while I worked out which ISA could be best for me.”
The man also said that naming his ISA helped him to reach his savings goal. “Before naming it, it was just one of those things that I said I would do one day, but giving it a name made it feel like an actual plan. Something I could work towards over time,” he explained.
As per GOV.UK, there are four types of ISA. These are cash ISAs, stocks and shares ISAs, innovative finance ISAs, and lifetime ISAs, reports the Express. Breaking down the differences on its website, Lloyds Bank said: “Cash savings are typically better suited to shorter‑term plans or money you may need sooner.
“Investment ISAs, also known as stocks and shares ISAs, can grow more over time. They’re ideal for medium to long-term goals.”
The bank added: “Individual Savings Accounts, ISAs for short, give you the opportunity to save or invest tax efficiently. So you don’t have to pay any tax on your savings and your investment profits are free of Capital Gains and UK Income Tax.
“You get an ISA allowance each tax year, a capped amount that you can put into one account or spread across several ISAs if you’d prefer. At the moment, the allowances are up to £20,000 in personal ISAs or up to £9,000 on behalf of a child in a Junior ISA.”
People can find the Lloyds Bank ISA Finder on the bank’s website. The bank told customers: “You can subscribe to the four types of ISA in lots of combinations, as long as you do not exceed the annual ISA subscription limit, currently £20,000. To apply for an ISA, you must be at least 18 and a resident in the UK for tax purposes.”
