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Ever since the first ISA accounts were launched in 1999, they have been a source of wealth creation for millions of investors. Over time, the rules and regulations surrounding how much you can invest in an ISA and the types of ISAs available on the high street have changed. Below is a list of 10 facts, many of which outline why ISAs can prove to be a popular and profitable method of saving. 1. What is an ISA? The acronym ISA stands for individual savings account. As the name suggests, they are a form of savings plan designed to appeal to the vast majority of the British population. ISAs were introduced to the UK in April 1999, replacing personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) in the process. In the 12 years since their introduction, there have been changes in the types of ISAs available and nowadays there are two types; a cash ISA and a stocks and shares ISA. 2. This year’s stocks and shares ISA limit is now £10,200 If you already own, or are looking to take out a stocks and shares ISA, the limit you can invest in this ISA in one financial year is £10,200. This is a £3,000 a year increase from the 2009-10 financial year. It is certainly worth ensuring that you are taking advantage of this increase, especially if you pay into an ISA each month and have additional capital available that you could invest to take advantage of this increased annual limit. 3. You can invest up to £5,100 in a cash ISA each year. If you own or are looking for a cash ISA, the limit you can invest in one financial year is £5,100. This is an increase of £1,500 on the cash limit of £3,600 that was in place during the 2009-10 financial year. 4. You can own both a stocks and shares ISA and a cash ISA and pay into both at the same time. While there are strict rules about how much you can pay into each type of ISA each year, an individual can own both types of ISA. It is perfectly feasible for someone to own a cash ISA and a stocks and shares ISA and pay into both each year, provided that the investment in each ISA does not exceed the £10,200 limit in total, and that no more than £5,100 is invested in the cash ISA during that financial year. It is a good idea to ensure that you maximise your savings by investing in the best ISAs for your situation. 5. Remember to qualify for the current financial year, paperwork must be logged before April 5th As with almost all major financial conventions, the ISA year runs from April 5th to April 4th. It is a good idea to check with your ISA provider as to when they require any payments or paperwork to be with them at the latest; some may accept applications until the last minute, others may need a little longer to process the information. If you hold an ISA, it is well worth checking this information with your provider if you are intending to invest money at this time to ensure that it reaches them in time to qualify for the 2010-2011 tax year. Any delay in this could cause investments not to count for the current tax year, which will impinge on the amount you can save in 2011-2012. 6. Remember all types of ISA accounts are tax-free forms of savings. The magic words ‘tax free’ are often banded about, but both forms of ISA truly are the easiest method of securing tax-free savings for the future. Not only is your initial investment in the ISA free from taxation, any money the ISA accrues over its duration is entirely safe from the taxman! You do not even have to report interest made on your ISA to the taxman on your tax form as it is not considered as taxable income. 7. There are some basic criteria that you are required to meet to open an ISA account. To open an ISA account in the UK you must be a permanent resident of the country. In addition, you must be at least 16 years of age to hold a cash ISA account and 18 years of age to hold a stocks and shares ISA account. 8. You can manage your ISA investments through investment specialists rather than a high street bank. As a financial product, it is worth considering if an ISA could benefit you and speaking to an independent investment specialist can prove worthwhile. Without affiliation to a major high street bank, a specialist can advise you which is the best ISA for you and can compare ISAs to ensure that the plan you select meets your needs. Furthermore, you can opt to let your investment specialist handle the management of your plan to maximise its growth. 9. Ensure you get the best deal and compare ISAs before deciding to invest. If you choose an ISA plan to suit your requirements, then do so carefully. Always compare ISAs available from a wide range of providers to ensure you get the best ISA for you. 10. From 2010, the yearly limits imposed on investing in an ISA will rise with inflation. As of 2010, the chancellor announced that the annual investment limits on each type of ISA will rise with inflation automatically each year. As such, it is well worth checking annually what the new threshold is for ISAs for the forthcoming financial year and ensure that you maximise the growth by topping up your investment to the new levels when possible. ISAs are a simple and easy way to maximise the benefit to you from your savings. They provide an efficient, tax-free and stable environment in which to keep your hard-earned cash and to let it grow annually. As a form of investment, they are certainly the coolest method of keeping your cash safe and working for you.

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If you have a private pension or company pension you are likely to have some decisions to make when you retire. You will be asked whether you would like to take a cash lump sum and what you would like to do with the remaining pot. As with any investment you should take the opportunity to research about the plans.