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The Chancellor announced changes to ISAs in his 2014 Budget to allow people to put up to £15,000 a year in them (in any mix of cash and stocks and shares).
ISAs are a popular savings product – about half of households have one – but many ISAs contain relatively small amounts. About half of ISAs had a market value of less than £6,000 in 2010/11.
This year, adults can save up to £5,640 a year in either a cash-only ISA or in a cash and stocks mixed ISA for which the total investment is £11,280. From July 2014, as announced by the Chancellor, the distinction between the two types of ISA will disappear and therefore the separate limit on cash savings will go.
Many people currently invest less than the maximum in an ISA each year – a look at the people who invest the current maximum gives an indication of who might invest more under the new rules. People with higher incomes are generally more likely to invest the maximum allowed than lower income groups.
Author: Lorna Booth