Individual Savings Account

An individual savings account (ISA) is a financial product available in the UK, designed for the purpose of investment and savings with a favourable tax status. ISAs were introduced on 6 April 1999, replacing the earlier Personal Equity Plans (PEPs) and Tax Exempt Special Savings Accounts (TESSAs), which continued to exist only for money already invested in them. ISAs were explicitly designed to appeal to a broader range of the population than these earlier products, which were sometimes claimed to be exclusively for the benefit of the middle class. ISAs are not an investment in their own right, but a tax-free wrapper in which investments can be sheltered. People over the age of 18 living in the UK can invest a maximum of £7,200 per year in each tax year. Investment may be made in two components: equities and cash with limits on how much can be put in each component.