The UK public is finding the ISA a smart way to save money
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The ISA (Individual Savings Account) has proved a popular way to save money, research has discovered.
According to data from the Halifax 37% of UK households have an ISA and this total rose to 14.2 million in the nine years to March 2009. The statistics come from figures provided by the Bank of England, HM Revenue and Customs and the Department for Work and Pensions.
Female savers and young people were drawn to them the most due to their tax-free conditions. The number of women with ISAs doubled in the first seven years and under 25s registrations rose the most at 88%. It is expected that they are using their savings as a mortgage deposit.
ISAs were introduced by Gordon Brown 10 years ago to encourage the UK to get into the savings habit. The economic downturn is likely to be the reason why the average amount paid into each account has decreased. This fell from £3, 064 in 1999-00 to £2,636 in 2008-09.
Individuals can only open one cash and one stocks and share Isa each year, regardless of their provider. The amount people can save is rising from £7,200 to £10,200 but a study by National Savings and Investments (NS&I) found that only 15% of respondents understood the new limits.
John Prout, sales director at NS&I said, “With less than two months to go until the end of the tax year, there is no time like the present for everyone to check their finances and plan to benefit from tax-free savings.”
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