Individual Savings Accounts, more commonly known as ISAs, celebrate their tenth birthday this year however recent research shows that many people have failed to adopt these tax-free vehicles.

ISAs were introduced in April 1999 to replace PEPs (Personal Equity Plans) and Tax Exempt Special Savings Accounts (TESSAs). ISAs are a form of investment or savings which sees no tax liability on the income earned from the assets held in the scheme. ISAs are not investments in themselves – they are actually a wrapper which sit around one or more investments.

The lack of tax payable on ISAs should be a big draw to savers however a recent survey by Nationwide Building Society showed that 62% of British savers who are eligible to hold an ISA currently do not have one. Further findings from Nationwide also showed that 23% of Brits do not currently save anything at all.

With the global financial climate in turmoil, it is becoming even more important to have some form of savings to fall back on should the worst happen and for those who do have savings, it is important to look at the benefits of having a cash ISA as the lack of tax tends to make them one of the best forms of cash savings accounts possible.

It is also important to save on a regular basis – the ISA allowance does not roll over so if you miss the ISA deadline for one year, the amount you can place in an ISA will not carry over until the next year. At this moment in time, you can invest a total of £7,200 in an ISA per tax year (6th April to 5th April). Up to £3,600 of this total can be placed into a Cash ISA with the remaining (or all of the allowance) being put into a Stocks and Shares ISA. It is also important to note that any money put into the ISA should not be withdrawn unless absolutely necessary – if you withdraw funds from the ISA, you will not be able to put the money back as you can only place the limit into an ISA, regardless of how much has been withdrawn.

Regardless of whether you save into an ISA or not, it is important to try and have some form of savings pot. One of the easiest ways to get into the saving habit is to put £5 a week via standing order into a savings account and to make sure you don’t withdraw any money from this wherever possible.

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