Happy 25th birthday to ISAs
May 2024
Happy 25th birthday to ISAs
Happy 25th birthday to ISAs
Happy 25th birthday to ISAs
May 2024
This year marks 25 years since the Individual Savings Account (ISA)* was first introduced. Today, there’s a wide range of ISA types available, including Cash and Stocks and Shares ISAs along with Lifetime ISAs and Junior ISAs. However, the core principle of ISAs remains the same – a tax efficient way for you to grow your savings.
A history of the ISA
ISAs were introduced by the UK government in 1999 to encourage saving by offering a tax-free way to grow your money. At their launch, there were two types of ISAs - Cash ISAs, which are similar to a typical savings account, and Stocks and Shares ISAs, where savers invest in various securities for potentially higher returns but with the risk of investing in the stock market. Since then, there have been a variety of different ISAs introduced to support specific groups of savers, each with its own benefits for saving.
More than two decades later and ISAs continue be an appealing savings tool due to their tax-efficient nature. During the 2021 to 2022 tax year, around 11.8 million adult ISA accounts were opened in the UK, showing that they’re a popular choice for those looking to save1.
Why is now a good time to open an ISA?
There are now several different types of ISA available on the market to help grow your savings, so you can find an option that best fits your needs and circumstances. With Cash ISAs, you'll have the option to choose from fixed or variable rate accounts, with different levels of access to savings if you need it. At Coventry Building Society we offer a range of Cash ISAs, including Junior ISAs for children, that can make your savings work harder for you.
While the choice of ISAs is now wider than before, interest rates are also higher than they have been in recent years, making ISAs a particularly compelling option. All interest on ISAs is paid tax-free, whereas with other types of savings accounts you may need to pay tax on the interest you earn. Take a look at our blog on Personal Savings Allowances to find out more.
It’s important to remember that the annual ISA allowance resets at the start of the tax year on 6 April. Whatever you don’t use is lost, so it’s best to make the most of the allowance every year to maximise the potential of your savings.
After 25 years, ISAs remain a great option to grow your money in a tax-efficient way. With more choice around variable and fixed rate options, and rates now higher than in recent years, now is a good time to look again at ISAs to make your money work harder for you.
*Interest on ISAs is paid tax-free, that is without tax deducted. ISAs are a savings scheme initiated by the Government and are subject to change by them. For example the favourable tax treatment may not be maintained.
1. Commentary for Annual savings statistics: June 2023
Information correct as at May 2024
Related articles:
What's new in the world of ISAs?
Take a look at the changes which are being introduced to ISAs.
This year marks 25 years since the Individual Savings Account (ISA)* was first introduced. Today, there’s a wide range of ISA types available, including Cash and Stocks and Shares ISAs along with Lifetime ISAs and Junior ISAs. However, the core principle of ISAs remains the same – a tax efficient way for you to grow your savings.
A history of the ISA
ISAs were introduced by the UK government in 1999 to encourage saving by offering a tax-free way to grow your money. At their launch, there were two types of ISAs - Cash ISAs, which are similar to a typical savings account, and Stocks and Shares ISAs, where savers invest in various securities for potentially higher returns but with the risk of investing in the stock market. Since then, there have been a variety of different ISAs introduced to support specific groups of savers, each with its own benefits for saving.
More than two decades later and ISAs continue be an appealing savings tool due to their tax-efficient nature. During the 2021 to 2022 tax year, around 11.8 million adult ISA accounts were opened in the UK, showing that they’re a popular choice for those looking to save1.
Why is now a good time to open an ISA?
There are now several different types of ISA available on the market to help grow your savings, so you can find an option that best fits your needs and circumstances. With Cash ISAs, you'll have the option to choose from fixed or variable rate accounts, with different levels of access to savings if you need it. At Coventry Building Society we offer a range of Cash ISAs, including Junior ISAs for children, that can make your savings work harder for you.
While the choice of ISAs is now wider than before, interest rates are also higher than they have been in recent years, making ISAs a particularly compelling option. All interest on ISAs is paid tax-free, whereas with other types of savings accounts you may need to pay tax on the interest you earn. Take a look at our blog on Personal Savings Allowances to find out more.
It’s important to remember that the annual ISA allowance resets at the start of the tax year on 6 April. Whatever you don’t use is lost, so it’s best to make the most of the allowance every year to maximise the potential of your savings.
After 25 years, ISAs remain a great option to grow your money in a tax-efficient way. With more choice around variable and fixed rate options, and rates now higher than in recent years, now is a good time to look again at ISAs to make your money work harder for you.
*Interest on ISAs is paid tax-free, that is without tax deducted. ISAs are a savings scheme initiated by the Government and are subject to change by them. For example the favourable tax treatment may not be maintained.
1. Commentary for Annual savings statistics: June 2023
Information correct as at May 2024
Related articles:
How to become a savvy saver
Navigating your savings journey by making smart choices.
Related articles:
What's new in the world of ISAs?
Take a look at the changes which are being introduced to ISAs.
