From April 2005, anyone with an Insurance Individual Savings Account needs to be careful when choosing to top it up. The Government has decided to incorporate the Insurance ISA within the mini stocks and shares ISA which means that investors will no longer be able to save into both.
The Government say that there are £720m in Insurance ISAs.
Our view
The insurance ISA was only offered by a few providers, hence the lack of popularity. Lack of interest could also be put down to the fact that only £1,000 per year could be invested.
From April 2005 'qualifying insurance products' can be used within ISAs but only products that will mature at 95% of the original capital invested will be allowed into the cash element. If less than 95% return is assured, the product will fall into the stocks and shares element.