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TAX TIP TUESDAY: Tax Free Savings Mark 20 Years

Our 5-minute read – Tax Tips – for UK doctors and dentists will help you save tax, get organised with your tax affairs and make sure you meet important deadlines with ease.


This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. The Financial Conduct Authority does not regulate tax advice. 


It’s hard to believe that it’s only been 20 years since Individual Savings Accounts (ISAs) made their debut. ISAs are now so ingrained in savings and tax culture, it’s hard to imagine a time when we couldn’t take advantage of the benefits.


ISAs have made great strides in the last two decades though, so it’s good to look back at where they all started. When they were first introduced in 1999/2000, the maximum annual contribution was only £7,000!

Now, in the 2019/20 tax year, the maximum annual ISA investment allowance is £20,000.

Quite a jump, but looking at factors that influenced the rise and how much has changed in 20 years, it makes a lot of sense.


Fun fact: If you contributed the maximum amount into an ISA each year since inception, you’d be sitting pretty on over £205,000 – all out of the tax man’s reach.


The range of ISAs available has expanded significantly over the years.

Now, you have a variety of options in which to spread your contribution allowance across – seven to be exact. You have:

  • Basic ISA
  • Junior ISA – for parents wishing to save on their children’s behalf
  • Inheritance ISA – for those whose spouse’s had an ISA at the time of their death
  • Help to Buy ISA – aimed at helping people get onto the property ladder
  • Flexible ISA – which allows more flexibility around withdrawals and re-starting contributions
  • Innovative Finance ISA – used for alternative savings and investments like peer-to-peer lending and crowdfunding, and
  • Lifetime ISA – used to help save for a house deposit or for retirement as a pension alternative.

Getting the most from your ISA

The benefits have remained chiefly the same throughout the years. No income tax is owed on interest earned, no tax to pay on dividends, no capital gains tax on profits, and best of all – no personal reporting required to HMRC.

Though the number and types of ISAs have expanded, one thing remains the same – your allowance expires annually and most people tend to wait until the last minute to make their contributions. Since we’re in the last month before the end of the tax year, a flurry of activity is to be expected.


To get the most out of your tax-free saving options, speak with a financial advisor. We take your entire financial situation into account and advise on the best avenues for savings and investments, and of course, save you the most tax possible.


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