A Cash ISA stands for a Cash Individual Savings Account; this is a special savings account that lets you save up to £20,000 each tax year free from Income Tax. If you save your money in a normal savings account, like a regular saver with your normal bank, you may end up paying tax if the amount you save exceeds your personal savings allowance (PSA).

For a basic-rate taxpayer, this means any interest that exceeds £1,000 will be taxed - unless you place your savings in an ISA. For higher-rate taxpayers, this threshold is even lower at £500.

Tax treatment depends on individual circumstances and may be subject to change in the future