ISAs continue to be popular with savers. In their first six months Individual Savings Accounts (ISAs) attracted almost 12.7 billion pounds of funds, with over 5.1 million accounts opened, according to figures released by the Inland Revenue today.
This 12.7 billion pounds is about 40 per cent more than the sums put into PEPs and TESSAs in the same period last year.
In response to the publication of these figures the Economic Secretary, Melanie Johnson said:
“This is another splendid set of figures for ISAs, showing that more and more people are taking part in this accessible, flexible and attractive way of tax free saving.
In particular there has been a very encouraging growth in stocks and shares ISAs. They are now running almost level with cash ISAs and, in the last quarter, about 20% more money was invested in them than into PEPs in the comparable quarter last year.”
1. The figures show :
almost 12.7 billion pounds paid into a total of over 5.1 million ISA accounts during the period from 6 April to 5 October 1999
over 6.5 billion pounds paid into mini ISAs, including :
– over 6 billion pounds into cash
– over 520 million pounds into stocks and shares
– around 20 million pounds into life insurance
over 6.1 billion pounds paid into maxi ISAs, including :
– over 5.7 billion pounds into the stocks and shares component
– over 400 million pounds into the cash component
– around 6 million pounds into the life insurance component.
2. In the comparable period of 6 April to 5 October 1998, some #9 billion was invested in PEPs and TESSAs.
3. During the second quarter (6 July – 5 October) amounts paid into ISAs increased by over 5.4 billion pounds and numbers of accounts by over 1.6 million compared with the figures for the first quarter to 5 July.
NOTES FOR EDITORS
The ISA Scheme
1. From 6 April 1999 individuals who are both resident and ordinarily resident in the UK for tax purposes and are aged 18 or over can subscribe to an ISA.
2. Investments in ISAs are completely tax free and in addition will benefit from the payment of a 10 per cent tax credit for the first five years on dividends from UK equities. There is no lock-in and no minimum subscription to the ISA.
3. An ISA can include three components:
cash (including National Savings);
stocks and shares; and
4. Savers can subscribe up to 5,000 pounds(7,000 pounds in 1999-2000) in each tax year, of which no more than 1,000 pounds(3,000 pounds in 1999-2000) may go into cash and 1,000 pounds into life insurance. Husbands and wives have their own subscription limits.
5. Each year savers can either subscribe to one “maxi” ISA, which must offer a stocks and shares component and can have either or both of the other two components, or up to three “mini” ISAs, one for each component.
PEPs and TESSAs
6. PEPs held on 5 April 1999 continue under their current rules, but with no further subscriptions. They receive the same tax reliefs as the ISA. No TESSAs can be taken out after 5 April 1999, but existing TESSAs can run their course under their existing rules. On maturity savers can transfer the capital (but not the interest) to an ISA. The value of PEP and TESSA holdings, further subscriptions to TESSAs and transfers from TESSAs to ISAs does not affect entitlement to subscribe to the ISA.
Tables are attached below