Individual Savings Account

related topics
{company, market, business}
{rate, high, increase}
{law, state, case}
{area, community, home}
{mi², represent, 1st}

An Individual Savings Account (ISA; pronounced /ˈaɪsə/) is a financial product available to residents in the United Kingdom. It is designed for the purpose of investment and savings with a favourable tax status. Money is contributed from after tax income and not subjected to income tax or capital gains tax within a holding or upon withdrawal. Cash and a broad range of investments can be held and there is no requirement to withdraw money before any particular age.


Introduction of ISAs

ISAs were introduced on 6 April 1999, replacing the earlier Personal Equity Plans (PEPs) and Tax-Exempt Special Savings Accounts (TESSAs). ISAs were explicitly designed to appeal to a broader range of the population than these earlier products, which were sometimes claimed to be exclusively for the benefit of the middle classes.[citation needed] Other channels for tax-privileged savings exist that also pre-date ISAs, notably the National Savings and Investments, which is a state owned bank offering a range of non-ISA tax free accounts (in addition to its own ISAs.)

With a few exceptions, such as from an employee share ownership plan, all investor contributions must be in cash. ISAs are available to UK residents aged over 16, but individuals between 16 and 18 are only permitted to use the cash component.

There are two broad types of ISA, cash or stocks and shares.

Cash ISA

A cash deposit that is similar to any other ordinary savings account, apart from the tax-free status. A cash ISA can also hold a qualifying investment that fails the five percent test for holding within a stocks and shares ISA[1] but this capability is rarely, if ever, made available.

Full article ▸

related documents
Economy of Zimbabwe
Economy of Jordan
Economy of Grenada
Economy of Slovakia
Economy of Djibouti
Economy of Saudi Arabia
Federal Housing Administration
Economy of Colombia
De Beers
Economy of São Tomé and Príncipe
Economy of Turkmenistan
Economy of Argentina
Financial market
Economy of Norway
Economy of Ukraine
Economy of the Philippines
Long-Term Capital Management
Economy of Jamaica
International Financial Reporting Standards
Economy of Taiwan
Economy of Iran
Economy of Greece
Economy of South Korea
Global Crossing
Economy of Poland