There are several ways people across the UK can boost their personal savings or give themselves a leg up when saving for a mortgage.

One popular way this is done is through the use of an Individual Savings Account or ISA.

Unlike a regular bank account, the money in these is often restricted for a certain amount of time, meaning it cannot be easily accessed.

What is an ISA and how do they work?

According to Nationwide, an ISA is a savings account that offers tax-free interest payments.

However, the amount a person can put into their ISAs each tax year is limited with a total of £20,000 being allowed across accounts.

The rates savers can expect from banks vary but, according to Money Saving Expert, the best Cash ISA rate available is 5.12%.

There are several different types of ISA, including Cash ISAs, Stocks and Shares ISAs, Innovative Financial ISAs and Lifetime ISAs.

The different types of ISAs in the UK

These are the different types of ISAs you can open in the UK.

Cash ISAs: These are ISAs that offer tax-free savings on interest earned and can be opened with as little as £1.

There are three different types of Cash ISA, Instant Access (money can be put in and withdrawn at will), Limited Access (Money can be taken out a certain number of times) and Fixed Rate (when money is locked away for a fixed term).

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Stocks and Shares ISAs: These involve account holders investing in funds (shares or bonds from various companies). The main benefit of this is that holders don't pay dividends, capital gains or income tax on any gains or income from investments held in their ISA.

Innovative Financial ISAs: This is a type of savings account aimed at those seeking to lend money to individuals, businesses or property developers while ensuring the interest earned on their investments is untaxed.

Lifetime ISAs: This type of ISA is aimed at younger people looking to save up for a mortgage.

Those looking to open an account must be aged 18 and over and under the age of 40 when making their first payment.

For any money invested, the government will add a 25% bonus. This means if you invest a maximum of £4000 into your account, you'll receive a £1000 bonus on top of this.

How many ISAs can I open?

Savers can open multiple Cash ISAs and Stocks and Shares ISAs with different providers.

However, you can only pay into a single Lifetime ISA in a single tax year.