Happy 20th birthday ISA!

The consumer-friendly simplicity of the ISA, which benefits from no Income Tax or Capital Gains Tax, has resulted in its popularity today, with around 42%3 of us holding one.

At launch in April 1999, the annual allowance for an ISA was just £7,000. Over the years, the limit has steadily increased, to stand at a generous £20,000. If you had invested the maximum over the last 20 years, by now you would have put around £206,000 into these tax-sheltered accounts. Different variations of ISA have been introduced over the years, joining the cash ISA and stocks and shares ISA.

There is a Help to Buy ISA designed to help first-time buyers, a Lifetime ISA which can be used to build up a deposit for a home or for longer-term retirement savings, and there is also a Junior ISA for children.

Although you have until 5 April 2020 to use your annual allowance, it makes sense to do so as soon as possible in the tax year to potentially give your money more time to grow.

3HMRC, Apr 2019

It is important to take professional advice before making any decision relating to your personal finances. Information within this page is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.

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