Many happy returns as ISA celebrates its 18th birthday
06 April 2017
- The Individual Savings Account (ISA) marks its 18th birthday this April, with one in four adults now investing in an ISA – twice as many as when it launched
- Savers investing the maximum amount every year into a cash ISA since launch will see returns on average of £16,750
- Half of adults in the South West have an ISA, while those in the South East have the ISAs with the highest average value
The ISA comes of age in April, reaching its 18th birthday, with reasons to celebrate and many happy returns for customers who have invested in these tax-free savings and investment accounts, according to new analysis1 by Prudential.
In the first year – the 1999/2000 tax year – 5.9 million individuals invested in Cash and Stocks & Shares ISAs – roughly 13 per cent of the UK’s adult population.
That grew to 12.7 million new Cash and Stocks & Shares ISA subscriptions in 2015/16, equating to a quarter of adults making the most of the Government’s tax-efficient savings vehicle.
But Prudential’s analysis2 reveals that had any of the 4.6 million savers who took out a Cash ISA in April 1999 invested the maximum amount every year and based on average interest rates over the period, they would now be sitting on a ‘happy return’ of nearly £16,750 – a 22 per cent pay out on a total investment of £77,220 over the course of the past 18 years.
The average subscription per account, across all types of ISA, has risen over the past 18 years, more than doubling from just over £3,000 in 1999/2000 to £6,338 in 2015/16. This rise has been fuelled by a steady growth in subscriptions in Cash ISAs, which grew by 131 per cent from £2,520 in 1999/2000 to £5,810 last year as investors sought to take advantage of the rising ISA investment limit, which now stands at £15,240 (and is set to grow to £20,000 in April 2017).