ISAs have become a cornerstone of the UK savings market, with more than four in ten households investing in one of the accounts.
Subscription growth since they were introduced in 1999 has been phenomenal, with 15 million investing some £45 billion in the 2009/10 tax year alone, according to the Tax Incentivised Savings Association (TISA).
Since 2006, subscription levels have increased by an average of 10% each year, with total ISA funds hitting £350 billion by April last year, split equally between cash and stocks and shares ISAs.
Figures show that lower income groups – those with annual earnings of £30,000 or less a year – accounted for about eight million (79%) of all cash ISA subscribers and 59% of all stocks and shares ISAs.
More than a quarter of all ISAs (26%) have balances of more than £15,000, while almost a third have balances of less than £3,000.
"A great part of the success of ISAs is due to the simple design and stable rules which have enabled ISAs to become highly valued by investors and providers alike," said Tony Vine-Lott, director general of TISA.
"Such is the strength of the ISA brand that the Government is planning a Junior ISA to replace Child Trust Funds and a 'Social ISA' to support the 'Big Society' initiatives. Providers are also being innovative with Corporate or Workplace ISAs being introduced."
The new ISA season is just round the corner and Moneyfacts.co.uk has got all of your investment choices covered.
If you're looking for a simple one year cash ISA, the Nationwide BS e-ISA paying a rate of 2.90% or the Halifax ISA Direct offering 3.00%, both of which allow transfers in, could be the right choice.
Those looking to tie their funds up for longer may prefer the look of Chelsea BS's three year fixed rate ISA which offers a rate of 4.00%.
Moneyfacts.co.uk also covers the stocks and shares ISAs, with popular choices including accounts from Virgin and Engage Mutual.
Looking for a cash isa - Compare cash isa rates and best isa rates for transfers Request a FREE ISA Savings brochure now
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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