By any measure, the humble ISA has been a huge success.

Since being launched on 6 April 1999 as successor to PEPs and TESSAs, the Individual Savings Account (ISA) has become an integral part of the UK savings and investment landscape.

Worth celebrating

By any measure, the humble ISA has been a huge success. Latest HMRC figures show that more than 22 million UK adults have one, with the combined market value of these accounts standing at over £740bn. Their principal benefit is that holders do not have to pay tax on dividends, interest or capital growth; indeed, in total, ISAs will collectively save investors around £7bn in tax this year.

Maxed out

Estimates* suggest that anyone who invested the maximum stocks and shares annual ISA allowance each year over the last quarter of a century could, depending on the performance of their chosen investments, have accumulated an investment pot worth around £900,000. The evidence also suggests that people who invested early in a tax year were likely to have amassed a larger amount than those who waited until the end – in other words, it’s time in the market that counts rather than timing the market.

Make the most of your allowance

For some people though, little and often is the preferred way to invest in ISAs and this approach can certainly amount to significant sums being saved as well. Indeed, whether investing a lump sum or saving on a regular basis, the real key is making sure you utilise as much as possible (having regard for other aspects of your current and future finances) of your ISA allowance each year.

*Vanguard, 2024