Policy
Individual Savings Accounts
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Individual Savings Accounts (ISAs) were introduced in 1999. All income and gains from ISA investments are exempt from UK income tax and capital gains tax.
Mutual deposit takers are especially strong in the market for cash ISAs, where they account for 36% of balances outstanding.
Further information about ISAs anf the current annual subscription limits are detailed in our leaflet below.
The BSA has highlighted several problems with this one-way-only approach. First, it benefits only higher rate taxpayers: there is no tax benefit to those on lower incomes holding equities inside - as opposed to outside - an ISA. (Cash ISAs give tax breaks to all taxpayers, including those on lower incomes.) As such it is likely to generate savings to the Exchequer - and this may have been a key driver of the Minister’s approach.
Second, it gives rise to new risks to the ISA holder: allowing one-way-only transfers, as the Treasury plans, means that errors of judgement or bad advice could never be rectified, without losing the ISA tax exemptions. The BSA considers it would be much better for consumers if they were allowed to transfer from equity to cash, as well as the other way round. As well as allowing ill-advised decisions to be reversed, this would also mean savers could more easily diversify their assets and benefit from the lower volatility offered by cash holdings.
Individual Savings Account and Building Societies
This BSA booklet is a guide to individual savings accounts. It can be downloaded here.Individual Savings Accounts Booklet
To view the BSA's response to HM Treasury's Consultation Paper - Individual Savings Accounts: Proposed Reforms - follow the link below.
ISA statistics
Statistics on the number of ISA accounts and the amounts deposited in them can be found via the link below.
