25 Years and counting for ISAs

Since being launched on 6th April 1999 as the successor to PEPs and TESSAs, the Induvial Savings Account (ISA) has become an integral part of the of savings and investment for those in the UK.

It is worth celebrating?

On the whole, ISAs have been a huge success. The latest HMRC figures show that more than 22 million adults in the UK have one, with the combined market value of these account standing at over £740billion.  The principal benefit of an ISA is so holders do not pay tax on dividends, interest or capital growth; in total, ISAs will collectively save investors around £7billion in tax this year.

Time in the market not timing the market

Vanguard estimate that anyone who invested the maximum ISA allowance every year into a Stocks & Shares over the last 25 years, depending on the performance of their investments could have accumulated an investment pot worth around £900,000.

This evidence also suggests that people who invested early in a tax year were likely to have amassed a larger amount than those who waited until the end, showing that it is more effective to have time in the markets rather than trying to time the market.

Make the most of your allowance

Little and often is the preferred route for some investors and this amount can certainly amount to significant sums being saved. Whether this being a single contribution or on a regular basis, the real key is making sure that you utilise as much as of your ISA allowance as you can each year.

If you feel that you need to do more with your money or wish to discuss more about tax efficient wrappers such as ISAs, then please do not hesitate to get in touch