Editing Individual savings account (section)

==History==
===Origins===
ISAs were introduced on 6 April 1999, replacing the earlier [[personal equity plan]]s (PEPs; very similar to a Stocks and Shares ISA) and [[tax-exempt special savings account]]s (TESSAs; very similar to a Cash ISA).  Other tax-advantaged savings that predate ISAs include many offered by [[National Savings and Investments]], a state-owned institution which has in the past offered a range of other tax-free accounts, in addition to its own ISAs.

Junior ISAs, introduced in 2011, replaced the [[Child trust fund|Child Trust Fund]].<ref>{{cite news| last=Blackmore| first=Nicole | title=Child trust fund savings can be moved to Junior Isas | newspaper=The Telegraph | date=23 December 2013| url=https://www.telegraph.co.uk/finance/personalfinance/savings/10534380/Child-trust-fund-savings-can-be-moved-to-Junior-Isas.html|quote = The schemes were replaced by Junior Isas in November 2011, which across the board offer better interest rates and a far wider selection of investments.}}</ref><ref>{{Cite web|title = Child Trust Fund - GOV.UK|url = https://www.gov.uk/child-trust-funds/overview|website = www.gov.uk|access-date = 2015-05-29}}</ref>

With a few exceptions, such as from an employee share ownership plan, all investor contributions must be in cash, not kind. Adult ISAs are available to UK residents aged over 16, provided that they have a [[National Insurance number]], but individuals between 16 and 18 are only permitted to use the adult cash component or can use a Junior ISA.

There are four broad types of adult ISA: cash, stocks and shares, innovative finance (including peer-to-peer lending) and lifetime.

===1999 Transition from older types of ISA ===
PEPs became stocks and shares ISAs, with an exemption that allowed them to continue to hold investments that could not be held in a stocks and shares ISA, provided that the investment met the pre-2001 PEP rules.

For some time there were Mini ISAs, Maxi ISAs and TESSA-only ISAs. A Mini ISA could hold cash OR stocks, potentially many if operated by a fund house or platform, while a Maxi ISA could hold cash AND stocks. Any UK resident individual aged 18 or over could invest in one 'maxi' ISA per year, with both components provided by a single financial institution. Alternatively, a person could invest in two 'mini' ISAs, one for each component. The two mini ISAs could be with two different providers if the investor wished.

The TESSA-only ISA was a type of cash ISA funded from a [[Tax-exempt special savings account|TESSA]], another predecessor of the ISA. New TESSAs could not be created after 5 April 1999, so the required five-year term of all TESSAs ended by 5 April 2004. '''TOISA'''s were created to allow the original capital (excluding interest) invested in a TESSA (up to £9,000) to be reinvested in a tax-free form.

===CAT standards 1999-2005===
In April 1999, the Government introduced a voluntary ''CAT'' standard for ISAs (standing for "Charges, Access, and Terms") to make them easier for inexperienced customers to understand and with the intention that lower costs would attract more investors.  The standard does not guarantee the investment performance or that investors would buy or be sold the right type of investment.

Many equity funds also meet the CAT standards, but the restriction on costs generally means that these funds are [[index fund]]s, which require little management and simply follow a given index, such as the [[FTSE 100 Index]].

CAT standards were discontinued by the Treasury on 6 April 2005 following the introduction of the stakeholder product suite, although existing CAT standard ISAs continued on the same terms and conditions.<ref>{{cite web|url=http://www.hm-treasury.gov.uk/press_95_04.htm|title=CAT standards|publisher=[[HM Treasury]]|access-date=27 October 2009|url-status=dead|archive-url=https://web.archive.org/web/20090714013542/http://www.hm-treasury.gov.uk/press_95_04.htm|archive-date=14 July 2009}}</ref>

===2007/8/9 limit changes===
In the March 2007 Budget the limits for the 2008/9 tax year were increased.<ref name="hmrc08change">{{cite web|url=http://www.hmrc.gov.uk/isa/rule-change-april08.htm|title=Rule changes from April 2008|publisher=[[HM Revenue and Customs]]|access-date=24 January 2008|archive-date=9 February 2008|archive-url=https://web.archive.org/web/20080209113735/http://www.hmrc.gov.uk/isa/rule-change-april08.htm|url-status=dead}}</ref> From tax year 2008/2009 the distinction between a Mini and Maxi ISA was abolished.

An insurance component was available in both Maxi and Mini ISAs until the 2005/06 tax year. Collective investment funds that once qualified for this component were reclassified as qualifying for either the Cash or Stocks & Shares component.

===Past subscription limits===

{| class="wikitable"
! Tax year !! Cash limit !! Stocks & shares limit !! Total subscription limit !! Junior ISA limit
|-
| 1999/2000 to <br /> 2007/2008 (mini) || £3,000 ||  £4,000 ||  £7,000 || not available
|-
| 1999/2000 to <br /> 2007/2008 (maxi) || £3,000 ||  £7,000 ||  £7,000 || not available
|-
| 2008/2009<ref name=hmrc08change />    || £3,600 ||  £7,200 ||  £7,200 || not available
|-
|  2009/2010    || £3,600 <br /> (£5,100 for over 50s from 6 Oct 2009<ref>http://webarchive.nationalarchives.gov.uk/20100407215313/http://www.hm-treasury.gov.uk/d/budget2010_pressnotice2.pdf {{Bare URL PDF|date=March 2022}}</ref>) ||  £7,200 ||  £7,200 <br /> (£10,200 for over 50s) || not available
|-
| 2010/2011<ref name="2009BudgetReport">{{cite web|url=http://www.hm-treasury.gov.uk/d/Budget2009/bud09_completereport_2591.pdf#page=167|title=Complete Budget 2009 Report|page=159|format=PDF|publisher=[[HM Treasury]]|access-date=22 April 2009|date=22 April 2009|quote=With effect from 6 October 2009, Individual Savings Accounts (ISA) limits will rise to £10,200, up to £5,100 of which can be saved in cash, for those aged 50 and over. The ISA limits will rise to these levels for all individuals with effect from 6 April 2010}}</ref>
|                                £5,100 || £10,200 || £10,200 || not available
|-
| 2011/2012<ref>{{Cite web|title=ISA - Individual Savings Account|url=https://www.scopulus.co.uk/taxsheets/isa.htm|access-date=2020-10-12|website=www.scopulus.co.uk|archive-date=22 January 2021|archive-url=https://web.archive.org/web/20210122131725/https://www.scopulus.co.uk/taxsheets/isa.htm|url-status=dead}}</ref>
|                                £5,340 || £10,680 || £10,680 || £3,600<ref name="Treasury2012Limits" />
|-
| 2012/2013<ref name="Treasury2012Limits">{{cite web|url=http://www.hm-treasury.gov.uk/press_115_11.htm|title=HM Treasury confirms higher ISA limits for 2012–13|publisher=[[HM Treasury]]|access-date=23 October 2011|date=18 October 2011|quote=subscription limits for Individual Savings Accounts (ISAs) from April 2012 will increase to £11,280 (up to half of which can be saved in cash) ... JISAs will be available from 1 November 2011.  Children will be able to have one cash and one stocks and shares JISA at any time, with an overarching annual contribution limit of £3,600}}</ref>
|                                £5,640 || £11,280 || £11,280 || £3,600
|-
| 2013/2014
|                                £5,760 || £11,520 || £11,520 || £3,720
|-
| 2014/2015<ref>{{Cite web|title=Tax and tax credit rates and thresholds for 2014-15|url=https://www.gov.uk/government/publications/tax-and-tax-credit-rates-and-thresholds-for-2014-15/tax-and-tax-credit-rates-and-thresholds-for-2014-15|access-date=2020-10-12|website=GOV.UK|language=en}}</ref><br />From 1 July 2014
|                                £5,940<br />£15,000 || £11,880<br />£15,000 || £11,880<br />£15,000 || £3,840<br />£4,000
|-
| 2015/2016 to<br /> 2016/17
|                               £15,240 || £15,240 || £15,240 || £4,080
|-
| 2017/2018
|                               £20,000 || £20,000 || £20,000 || £4,128
|-
| 2018/2019
|                               £20,000 || £20,000 || £20,000 || £4,260
|-
|}

In the March 2010 Budget the then [[Chancellor of the Exchequer]] [[Alistair Darling]] announced that in future years the limits would rise annually with inflation,<ref>{{cite web|url=https://www.telegraph.co.uk/finance/personalfinance/7513829/Budget-2010-ISA-limits-will-rise-with-inflation.html|author=Gammell, Kara|title=Budget 2010: ISA limits will rise with inflation|work=[[The Daily Telegraph|The Telegraph]]|date=25 March 2010|access-date=2 April 2013|quote=The annual limit on individual savings accounts (ISAs) will rise from £7,200 to £10,200 from next month and the limits will increase each year in line with inflation}}</ref> rounded to the nearest £120, to ease the arithmetic for those using monthly payment schemes. From 2013 to 2014 the inflation index used was changed from [[Retail Prices Index (United Kingdom)|RPI]] to [[CPI]].

The Chancellor of the Exchequer [[George Osborne]] announced in the March 2014 Budget that the adult ISA limit would be increased to £15,000 from 1 July 2014, and the Junior ISA limit to £4,000. From that date savers were allowed to invest the full amount as cash or stocks and shares, or a mix of both. Savers are also able to switch stocks and shares ISAs to cash ISAs.<ref>{{cite news |last=Peachey |first=Kevin |date=19 March 2014 |title=Budget 2014: What it means for you |url=https://www.bbc.co.uk/news/business-26619585 |work=BBC News |access-date=27 March 2014}}</ref>

===Restrictions removed from July 2014===
Many restrictions were significantly relaxed from 1 July 2014<ref name=HMRCNewISAFAQ2014>{{cite web|url=http://www.hmrc.gov.uk/isa/new-isa-faq.pdf|title=The New ISA - Frequently Asked Questions|publisher=[[HM Revenue and Customs]]|access-date=2 June 2014|quote=The Government is changing the name to reflect the significantly increased limits and flexibility that will be available to account holders}}</ref> and the branding<ref name=MSE2014>{{cite web|url=http://blog.moneysavingexpert.com/2014/11/14/it-seems-an-isa-is-nicer-than-a-nisa-so-were-going-to-call-them-isas/|title=It seems an ISA is nicer than a NISA – so we're going to call them ISAs|publisher=[[MoneySavingExpert.com]]|access-date=11 January 2015|quote=HMRC tells us "ISA is the correct term to use in line with HMT Regulations and HMRC Guidelines. NISA is purely a marketing/product/publicity term." ... So from now [14 November 2014], I’ve decided MoneySavingExpert.com is going to revert back to calling it the good old ISA ... and we suspect gradually over the next year to see everyone else who called it a NISA to retrench too}}</ref> "New ISA" was introduced for this batch of changes:

* There was a ban on transferring from S&S ISA to cash ISA. Cash to S&S was allowed from 2008/2009. A JISA could always go in both directions.
* Interest on cash in a S&S ISA is no longer subject to a 20% charge. All cash in a S&S ISA is subject to the [[Financial Conduct Authority|FCA]] client money rules and cash ISA providers can opt in if they wish.<ref name=FCAISAClientMoney>{{cite web|url=http://www.fca.org.uk/news/firms/ps1410-client-money-held-in-individual-savings-accounts-|title=PS14/10: Client money held in Individual Savings Accounts and feedback to CP14/9 and final rules|publisher=[[Financial Conduct Authority]]|access-date=2 June 2014|quote=requiring all investment firms who hold any money within stocks and shares ISAs to hold these sums as client money ... allowing investment firms that manage cash ISAs to opt into the CASS regime and elect to hold money in cash ISAs as client money}}</ref>
* Cash can now be held in a S&S ISA even when not intended for investment. There was no specific time limit on how long cash could be held under the old rules, just whether the ISA manager believed the money was being held for future investment.
* The S&S ISA had a five years remaining at time of purchase restriction on public debt securities such as [[government bonds|government]], [[corporate bond]]s, debentures and Eurobonds. Conditional redemption, such as that based on possible future market performance, was acceptable, as was the borrowing company or government redeeming the security early or exercising of options if there are defaults, insolvency risks or covenant breaches.
* The S&S ISA had a requirement for a credible possibility of losing at least 5% of the investment, called the 5% test.<ref name=HMRCBulletin2 /> Investments that failed the test had to be held in a cash ISA instead:
** A cash ISA can still hold qualifying investments that failed the 5% test for holding within a stocks and shares ISA<ref name=HMRCBulletin2>{{cite web|url=http://www.hmrc.gov.uk/isa/isa-bulletin2.htm|title=ISA Bulletin 2: Qualifying investments – db x-trackers – Sterling Money Market ETF|publisher=[[HM Revenue and Customs]]|access-date=24 November 2010|quote=investors could be certain (or near certain) of getting back 95 per cent or more of their initial investment. The fund therefore fails the 5 per cent test and is a qualifying investment for cash ISAs, not stocks and shares ISAs|archive-date=24 March 2010|archive-url=https://web.archive.org/web/20100324233859/http://www.hmrc.gov.uk/isa/isa-bulletin2.htm|url-status=dead}}</ref> before 1 July 2014<ref name=HMRCISABulletin57>{{cite web|url=https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/377727/bulletin57.pdf|title=ISA manager bulletin 57|publisher=[[HM Revenue and Customs]]|access-date=28 January 2016|quote=Any investments which did not satisfy the 5 per cent ‘cash-like’ test before 1 July 2014 and are held in a Cash ISA can continue to be held in a Cash NISA after 1 July 2014}}</ref> when the test was removed but this facility was rarely, if ever, made available by a cash ISA provider. Such investments would not be deposits and would not have the deposit FSCS protection, they may have the £50,000 investment protection instead, the provider must make the situation clear.