The rise in personal savings during the pandemic led to a boom in ISA investments last April, with £1.5bn flowing into the products. However, despite previous increases in line with inflation, annual subscriptions for ISAs, Junior ISAs and Child Trust Fund will remain the same for the sixth year running.
If the limit had been updated in line with inflation each year since the start of the 2017/18 tax year, then the current adult ISA limit would be £21,776 for the 2022/23 tax year. Instead, it remains £20,000.
Some commentators have described the tax freeze as a stealth tax. Heather Owen, financial planning expert at Quilter said: ‘At the last Budget in March, the Chancellor froze various rates and reliefs to sneakily increase the tax take as people gradually earnt more and as asset prices increased.’
With inflation soaring and predicted to go above 4% some argue it should rise as there are concerns people’s wealth will suffer otherwise.
In the meantime, people will continue to be able to save or invest up to £20,000 each tax year into either a cash or stocks and shares ISA whilst shielding any interest, dividends or capital gains from tax.
Can we help with your ISA subscriptions?
ISA allowance 2022/23 – £20,000
JISA allowance 2022/23 – £9,000
Child Trust Fund 2022/23 – £9,000
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