A look back in time as the ISA celebrates 25 years!
19 Apr 2024


Cast your mind back to 1999. You may remember the world was getting ready to celebrate ringing in the new millennium (or fearing that the end of the world was imminent!). There were a lot of bright colours, questionable hairstyles that are still pretty memorable and the Nokia 3210 was the year’s most popular mobile phone, but what you might not remember is that 1999 saw the launch of the Individual Savings Accounts, better known as the ISA.

As we enter 2024, we take a look at how ISAs have changed over the years and what potential changes may be introduced for the 2024/2025 tax year.

The birth of the ISA

Believe it or not, when ISAs were first introduced, people were unsure whether they would become a popular savings product. They were even labelled as a “colossal failure” by Labour MP Quentin Davies due to the slow uptake of accounts.1

In 1999 there was only two types of ISAs available – Cash ISAs and Stocks & Shares ISAs. As Junior ISAs were only introduced in 2011/2012 followed by Lifetime ISAs in 2017/2018. The allowance was also very different. The limit for Cash ISAs being £3,000 per tax year and £7,000 total allowance per tax year.2

But over time, they’ve gradually become more popular as people take advantage of the amount of tax-free saving, which currently sits at £20,000. From the latest figures from HMRC data, 11.8 million Adult ISA accounts were subscribed to. Not much of a colossal failure in the end! 3

As they’ve evolved over the years, it’s hard to believe that they’ve only been a savings staple for the last quarter of a century. Originally, they were introduced to replace the Personal Equity Plan (PEP) and the Tax-Exempt Special Savings Account (TESSA) as a way to simplify savings and have changed a lot during their time.

How have ISAs changed?

Now the 2024/2025 tax year has begun, the government has made more changes to the way ISAs work. In last year’s Autumn statement, the Chancellor of the Exchequer Jeremy Hunt announced a roadmap for ISAs with the aim to further simplify the ISA process. Here are the changes the government have announced that you can look for when opening a new ISA:

  • Savers have more flexibility around how many ISAs they can hold and where they can invest their money. In the past ISA savers were only allowed to subscribe to one of each type of ISA, splitting the £20,000 allowance between those accounts. However, with the new changes, savers will be able to have several of either account each tax year.
  • Savers can hold separate ISA accounts with multiple providers. To give people even more flexibility, savers can now invest part of their £20,000 allowance across different ISA accounts from different providers, rather than keeping the whole amount in the same account.
  • New age limits will affect when you can open an adult ISA. Since 6 April, the age limit of when you’re allowed to open an adult ISA has changed from 16+ to 18+. This means that 16 and 17-year-olds will only be able to open a Junior ISA. This change is compulsory, and all savings providers need to follow this rule.

It’s worth noting that most of these changes are non-compulsory, so not all providers will implement these changes. If you’re looking for an ISA with any of the above, make sure to check if and when they’re being implemented with your chosen provider.

If you’re thinking about saving with an ISA, view our latest range of Cash ISA’S or why not pop into one of our branches to talk about your options? And don’t forget to keep an eye on our website for any changes that we make in the new tax year.

1Commentary for Annual savings statistics: June 2023 - GOV.UK (www.gov.uk)


3A brief history of Isas in facts and figures (thetimes.co.uk)