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Isas `excellent form of debt management`
12 December 2007
A government report has highlighted the success of individual savings accounts (Isas) as more consumers use them as a form of debt management.
Over the last few years, banks and the government have been advising consumers to save their money in high-interest Isas as they benefit more from the accounts than standard bank accounts.
As a result, figures from the Treasury show that 40 per cent of Isas open in the UK are currently holding more than £8,000, while one in three Isa account holders said the tax-free accounts were a big incentive for them to save.
Economic secretary to the Treasury Kitty Ussher said: "This research helps to confirm the success of Isas in encouraging people to save, enabling them to build up a financial asset. Next year we will be introducing reforms to build on that success."
Consumers can save up to £7,000 each year in an Isa and they do not get taxed on their interest earnings.
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