This snapshot taken on 07/04/2010, shows web content selected for preservation by The National Archives. External links, forms and search boxes may not work in archived websites.
Newsroom & speeches
142/07
10 December 2007
Economic Secretary to the Treasury Kitty Ussher MP today published two reports that highlight the success of Individual Savings Accounts (ISAs) in encouraging people to save.
ISAs are a straightforward, tax-free savings product available to all adults.
The two reports -'Individual Attitudes to Saving: Effect of ISAs on People’s Saving Behaviour Research into Attitudes and Motivations for Saving in ISAs'; and 'Saving in ISA' found that the tax incentives offered through ISAs to encourage people to save have been successful, with one third of people now holding an ISA account.
The reports find that of ISA holders questioned:
Kitty Ussher said:
“This research helps to confirm the success of ISAs in encouraging people to save, enabling them to build up a financial asset.
“Next year we will be introducing reforms to build on that success. We will make ISAs simpler to use, more flexible, and more generous with a higher investment limit. We hope that these changes encourage even more people to use ISAs to save.”
The Government recognises the importance of savings in providing people with financial independence throughout their lives, security, and comfort in retirement. The research findings confirm the positive effect of the Government’s work to encourage saving, with the majority of respondents thinking it is important to save. The research found that key influences on savings behaviour included role models and habits generated during childhood. Child Trust Funds, which aim to encourage and reinforce the saving habit during childhood, will ensure that every child will have a financial asset with which to start their adult life.
1. The reports 'Individual Attitudes to Saving: Effect of ISAs on People’s Saving Behaviour Research into Attitudes and Motivations for Saving in ISAs'; and 'Saving in ISA' are available from the research pages of the HMRC website.
2. The research evidence is based on respondents’ perceptions of their motivations for saving in ISAs. The research consisted of:
A survey based on 3,759 interviews, with a random sample of the GB population, on the Office of National Statistics (ONS) Omnibus Survey, and qualitative research, carried out by IPSOS-MORI, based on 50 in-depth interviews - 35 with ISA savers and 15 with non-ISA savers
3. Reforms to the ISA regime will come into effect in April 2008. They are:
ISAs are available indefinitely. There is no set end date for ISAs.
Every adult has an annual ISA investment allowance of £7,200. Up to £3,600 of that allowance can be saved in cash with one provider. The remainder of the £7,200 can be invested in stocks and shares with either the same or another provider.
Savers are able to transfer some or all of the money saved in previous tax years from cash ISAs to stocks and shares ISAs without affecting their annual ISA investment allowance.
Savers are also able to transfer money saved in the current tax year in cash ISAs to stocks and shares ISAs. Such transfers must be the whole amount saved in that tax year in that cash ISA up to the day of the transfer.
Once money saved in the current tax year is transferred from a cash ISA to a stocks and shares ISA, it is treated as if it had been invested directly into a stocks and shares ISA in that tax year. The saver is able then to still save up to the full remaining balance of their £7,200 annual ISA investment allowance in ISAs in that tax year, including up to £3,600 in a cash ISA.
All PEP accounts will automatically become stocks and shares ISAs on 6 April 2008, and become subject to ISA rules.
4. Media enquiries should be addressed to the Treasury Press Office on 020 7270 5238.
5. Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558, or by e-mail to public.enquiries@hm-treasury.gov.uk
6. This press release and other Treasury publications and information are available on the Treasury website. If you would like Treasury press releases to be sent to you automatically by e-mail you can subscribe to this service from the press release site on the website.
