Individual Savings Accounts
The question
To ask the Chancellor of the Exchequer, what assessment her Department has made of the impact of the real-terms freeze in the annual Cash ISA allowance on (a) pensioners and (b) other low-risk savers.
Answered by Lucy Rigby
ISAs incentivise saving and investment by providing generous tax advantages to individual taxpayers. Individuals can save up to £20,000 into an Individual Savings Account (ISA) each year, and any savings income received within an ISA is tax free. In 2022/2023 the average Cash ISA subscription was £5,296.
Along with the Personal Savings Allowance of up to £1,000 for basic rate taxpayers and £500 for higher rate taxpayers, and the Starting Rate for Savings, which allows for tax free savings income of up to £5,000 for those with earned income below £17,570, around 90 per cent of people with savings income pay no tax on that income.
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