Grow your money, shape your future: Why ISAs matter

We’re hearing from lots of people keen to start saving and investing, but unsure where to begin. One of the simplest ways to get going is with an ISA. It’s a flexible, tax-free account that helps you grow your money – and you don’t need a big lump sum to start.

Whether you’re about to qualify as a dentist or doctor, or you’ve already started working, receiving your first few pay cheques is an exciting time. As you begin earning, you might be thinking about what to do with your money.

Among all the financial decisions ahead, there’s one simple step that could set you up to long-term financial success: opening an ISA. An ISA can also complement other savings, such as your NHS or private sector pension, giving you flexibility and access to tax-free savings alongside your retirement plan.

You don’t need lots of money to get started

When people think about saving and investing, they often imagine needing a big lump sum. The reality is that you can start small. Many ISAs allow you to set up a direct debit for as little as £25 a month.

It’s all about getting into the habit of saving regularly. As a newly qualified doctor or dentist your salary will increase over time, and if you start putting something away now, even a modest amount, your future self will thank you.

What is an ISA and why should you care?

ISA stands for Individual Savings Account. It’s a way to save or invest money tax-free. That means you don’t pay tax on any interest, dividends or capital gains within your ISA – something that makes a real difference over time.

Each tax year, you get an ISA allowance (£20,000 for 2025/26), which is the maximum you can put into ISAs across different types.

The different types of ISAs

There’s more than one type of ISA, and choosing the right one depends on your financial goals.

• Cash ISAs work like a savings account but with tax-free interest. Ideal if you want somewhere safe to keep your money while earning a little interest.
• Stocks and shares ISAs are a great option if you want to invest for the long term. Your money is invested in stocks, bonds or funds, and while there are risks, historically investments tend to grow over time.
• Lifetime ISAs (LISAs) are designed to help you buy your first home or save for retirement. A LISA lets you save up to £4,000 a year with a 25% government bonus.
• Innovative finance ISAs are a niche option that lets you invest in peer-to-peer lending. It’s riskier and less common, but worth knowing about.

For many young professionals, a combination of a cash ISA for short-term savings and a stocks and shares ISA for long-term investing can be a smart approach.

Unlike pensions, ISAs give you the flexibility to access your money whenever you need it, making them a useful option for medium and long-term financial goals.

Why start now? The power of compounding

The earlier you start, the better, thanks to something called compounding. Think of it like rolling a snowball down a hill. It starts small, but as it rolls, it picks up more snow and gets bigger. And the bigger it gets, the more snow it collects.

That’s how compounding works. Your savings or investments grow, and then those gains start earning returns too. Over time, it can build into something much bigger than you expected.

The first ISA millionaires – and how long ISAs have been around

You might be surprised to hear that there are ISA millionaires – people who have built a seven-figure tax-free portfolio within their ISA.

The first ISA millionaires started appearing a few years ago, and while they’ve typically been investing for a couple of decades, it proves what’s possible with regular contributions, patience and the power of compounding.

ISAs have been around since 1999, so they’re well-established and trusted. Over the years, the rules have evolved, making them even more attractive as a tax-efficient way to save and invest.

Making saving easy: set it and forget it

One of the best ways to build your savings effortlessly is to set up a regular direct debt into your ISA. Some people worry about investing being too risky, but with a stocks and shares ISA, you can start with diversified funds and spread the risk across different investments.

While the value can go up and down, investing for the long term helps smooth out short-term fluctuations. Think of it as paying yourself first. Before you get tempted to spend everything in your bank account, a portion goes straight into your ISA, helping you build wealth in the background.

A good starting point is to save or invest a percentage of your salary each month – whether that’s 5%, 10% or whatever you feel comfortable with. As your earnings increase, you can adjust your contributions.

The next step

Your first job is just the beginning of your career, and taking control of your finances early on can make a huge difference later.

Opening an ISA is a simple yet powerful step towards financial security. You don’t need a huge amount to get started, and the sooner you begin, the more you can benefit from compounding growth and tax-free savings.

So, why not take the next step? Whether it’s a cash ISA for a rainy-day fund, a stocks and shares ISA for long-term investing or a lifetime ISA to help buy your first home, getting started now could be one of the smartest financial decisions you can make.

Please note this does not constitute as financial advice.

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

Remember the value of investments and any income can go down as well as up, and you may get back less than you invest.