A Individual Savings Account (ISA) is a financial product available in the UK, designed for the purpose of tax-free savings. ISAs were introduced on April 6 1999, replacing the earlier PEPss and TESSAs - they 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. However they have been criticised as confusing.
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2 Subscription limits 3 CAT standards |
There are two types of ISA: 'mini' and 'maxi'. You can only invest in one ISA in a tax year. An ISA can contain up to three components:
The amounts which may be deposited in an ISA in a financial year are:
In April 1999 the Government introduced a voluntary CAT (for "Charges, Access, and Terms") standard for ISAs, to make them easier for inexperienced customers to understand, and harder to mis-sell. It does not guarantee the investment performance. Many products now comply with this standard.Mini and maxi ISAs
In a mini-ISA, the three components may be from different providers. In a maxi-ISA, only one provider is allowed.Subscription limits
These limits are subject to change by the Chancellor of the Exchequer.
CAT standards