The Individual Savings Account (ISA) turns 10 this year, and as a tax-efficient savings option has already been taken up by 37% of households in the UK, according to Halifax.
There were a total of 14.2m ISA accounts in the UK in 2008/09, the Halifax said.
Growth in uptake of ISA accounts has been faster among women than men. The number of female ISA savers rose by 52% from 1999 to 2007, when it had reached 6.3m, while the number of male ISA savers rose by 35%.
The ISA is the savings account of choice among younger savers as well. The number of ISA savers in the under-25 age group rose by 88% from year one to top 1.4m in year 7 (2006/07).
Of total UK savings in ISAs in 2009, 58% was held in cash ISAs, with the remaining 48% held in the cash ISA’s slightly more volatile sister, the stocks and shares ISA.
Cash ISAs offer growth on savings that is totally tax-free, which means that no tax is payable on interest paid within the account.
A small tax levy of 10% on stock dividends paid in stocks and shares ISAs means that the account cannot be termed tax-free, but rather ‘tax advantaged’, as it still offers considerably more shelter from tax than other stocks and shares investments.
