ISAs
ISAs are now a permanent feature of the savings landscape.
| Individual Savings Accounts (ISAs) |
| Overall investment limit |
£7,200 |
| Including cash maximum of |
£3,600 |
Notes
- Stakeholder cash and medium term products can be held in your ISA.
- Investments in ISAs are free of income tax and capital gains.
- Those aged 16-17 can invest up to £3,600 only.
- ISAs allow you to take your money out at any time without losing tax relief and furthermore you are not required to declare income and capital gains from ISA savings.
- The income tax credit is restricted to 20%. Capital gains tax deferral relief is also available.
Personal Equity Plans (PEPs)
As from 6 April 2008 PEP's are now part of the ISA savings regime.
Did you know?
A 2007 HMRC survey* of 1250 individuals concluded that:
- one third of ISA holders had been encouraged to save by the existence of tax-free ISAs and approximately one quarter cited tax incentives as the principle reason for saving.
- 40% of ISA holders have saved £8,000 or more in their ISA account.
- Mini cash ISAs were the most popular form of ISA
- 53% of ISA holders fund their ISAs from their income, while 28% fund their ISA by a transfer from taxable savings and 16% transferred funds from non-taxable savings.
- 14% reported that inheritances and gifts were the primary source of their ISA investments.
- 60% have never made a withdrawal from their ISA while 10% of ISA holders had made four or more withdrawals
* Individual Attitudes to Saving: Effect of ISAs on People's Saving Behaviour
