An ISA (Individual Savings Account) provides a way to save/invest without paying tax on the interest earned, up to a limit of £15,240 for ISAs and £4,080 for Junior ISAs.
When choosing an ISA you have the option to select from three types, all you can allocate your savings between the three as long as the total does not go over the maximum limit of £15,240.
Cash ISA: Similar to a standard savings account
Stocks and Shares ISA: Gives you the ability to invest your savings into shares, funds and corporate or government bonds
Innovative Finance ISA: With the growth of Peer to Peer (crowdlending) platforms, this new form of ISA has been launched allowing people to earn tax-free interest through Peer To Peer lending platforms. However this form of ISA is not currently protected by the Financial Services Compensation Scheme (FSCS).