ISAs proving ‘increasingly popular’

The popularity of Individual Savings Accounts (ISAs) has burgeoned since they were introduced 10 years ago, a new study has revealed.

According to research by the Halifax, there were 14.2 million ISAs at the end of March last year, up from 9.3 million recorded in March 2000.

The group found that some 37% of households in the UK now have an ISA, with people in the South East most likely to have one at 44%.

The popularity of the tax-free accounts has particularly risen amongst women and young people.

From 6 April 2010 the ISA allowance will be raised from £7,200 to £10,200 for all investors, up to £5,100 of which can be saved in cash. The remainder may be invested in one stocks and shares ISA.

Depositors born on or before 5 April 1960 were able to take advantage of the higher limit from 6 October 2009, following announcements made in the Chancellor’s Budget in April.

However, in a survey by National Savings and Investments (NS&I), just 15% of those questioned said they understood the new limits. ‘Understanding the allowances and reviewing the terms of the product is vital for savers,’ said John Prout, sales director at NS&I.

‘With less than two months to go until the end of the tax year, there is no time like the present for everyone to check their finances and plan to benefit from tax-free savings.’

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