Main Page | See live article | Alphabetical index

Individual Savings Account

A Individual Savings Account (ISA) is a financial product available in the UK, designed for the purpose of tax-free savings. ISAs were introduced on April 6 1999, replacing the earlier PEPss and TESSAs - they 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 class. However they have been criticised as confusing.

Table of contents
1 Mini and maxi ISAs
2 Subscription limits
3 CAT standards

Mini and maxi ISAs

There are two types of ISA: 'mini' and 'maxi'. You can only invest in one ISA in a tax year. An ISA can contain up to three components:

In a mini-ISA, the three components may be from different providers. In a maxi-ISA, only one provider is allowed.

Subscription limits

The amounts which may be deposited in an ISA in a financial year are:

These limits are subject to change by the Chancellor of the Exchequer.

CAT standards

In April 1999 the Government introduced a voluntary CAT (for "Charges, Access, and Terms") standard for ISAs, to make them easier for inexperienced customers to understand, and harder to mis-sell. It does not guarantee the investment performance. Many products now comply with this standard.