The bank shared a message for customers on social media (stock photo) (Image: Getty)
Lloyds Bank has issued an alert to customers with ISA accounts. Individual Savings Accounts (ISAs) are often popular with people looking to save towards big goals or invest their money, as they allow tax-free savings. However, the banking group wants to remind customers that ISAs could be useful for smaller savings goals, too.
In a TikTok post, @Lloydsbank told customers they could ‘start planning’ to reach smaller saving goals, such as paying for a new tattoo, using an ISA. Offering advice, the bank explained: “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 offered an example in the video accompanying the post. The video included an interview with a man hoping to save money for a new tattoo. In the clip, he said: “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.”
He added 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.”
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As GOV.UK explains, there are four types of ISA. These are cash ISAs, stocks and shares ISAs, innovative finance ISAs, and lifetime ISAs. 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.”
Lloyds Bank offers an ISA Finder on its website. It adds that an ISA with instant access savings could suit someone with short-term goals, while an investment ISA could suit someone with medium to long-term goals.