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An ISA at every age

There are Individual Savings Accounts (ISA) available for almost everyone. There are junior ISAs for those under 18, when you hit 16 you can have an ‘adult’ cash ISA and for those over 18 there is the stocks and shares ISA.

Despite there being an ISA for every age group, older savers are more likely to use their annual ISA allowance and dominate the usage rates.

Older savers more likely to use their ISA allowance

Around 21.6 million individuals held an Adult ISA in the 2013-14 tax year. Of those 6.2 million ISA holders were over the age of 65. Those over the age of 65 are five times as likely to hold an ISA than those under the age of 25.

However, in 2013-14 (latest data available) that gap showed signs of beginning to close as the 65 and over age bracket were three times as likely to use their ISA allowance than those under the age of 25.

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The size of savings in an ISA also increased with age. Those with ISA savings over the value of £30,000 are most likely to be over the age of 65, whilst those with an ISA under the value of £3,000 is highest amongst the under 25 age group.

Younger savers should start investing

According to data from HMRC savers between the ages of 45 and 64 are most likely to save using a stocks and shares ISA. Since an investment should be used as part of a long-term financial strategy younger individuals need to start considering investing their ISA allowance. Particularly at a time of record low interest rates where cash savings are being eaten away by inflation.

Positively, about 78% of those under the age of 25 are active savers. Data shows a decrease in the popularity of ISAs with those in the younger age brackets when compared to previous years.

See how the Moneyfarm Stocks & Shares ISA could work for you

Making the most of your ISA allowance

Regardless of age, there is one simple thing to do when managing your money: open an ISA. This allowance allows you to get tax-free returns and is something the Government factors in to the Budget. Now we also have the personal savings allowance, and interest rates are low, there is little point in a cash ISA, many are predicting its death. Investing offers the opportunity of inflation beating returns and digital wealth managers are lowering costs and making it simple, all age groups are running out of excuses.

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