5 reasons to have an ISA

Rachel Springall, finance expert at Moneyfacts, shares her top ISA tips:

1. Tax free

The biggest benefit is your savings are kept in a tax-free wrapper, so by putting your savings into an Isa you are keeping it away from the taxman.

2. Little and often

You don't have to invest a huge lump sum, you can save little and often to build up a nice pot. You can also transfer old Isa holdings to new ones if they are not performing well.

3. Choice of easy access and fixed

While some savers may want to lock money away for a greater return, others may prefer to have their savings accessible to use as their emergency fund – and with Isas both options are there to choose from.

4. Save more

There is growing encouragement for people to utilise their Isa allowance and now you can invest up to £15,000 tax-free each year. Children can also start the savings habit at an early age by using a Junior Isa up to £4,000 per year. Find out more with our Junior ISA guide.

5. Spread risk

You can choose a cash Isa where you get a simple rate of interest, or dabble in stocks and shares instead, but if you do this make sure to seek advice to determine your risk profile. Cash Isas with providers covered under the FSCS (Financial Services Compensation Scheme) mean up to £85,000 is safe, but with Stocks and Shares Isas your investment will be at risk.

Want to keep more of your hard-earned cash away from the taxman? Read our 10 ways to cut tax!