Individual Savings Accounts (ISAs)

The CAT standards

There are different CAT standards for cash, stocks and shares and life insurance ISA investments.

The standard for cash ISAs

Charges

  • There must be no one-off or regular charges of any kind, such as charges for withdrawals or for any regular service (for example, use of cash machines). However, charges for replacements such as duplicate statements or lost cards are permitted.

Access

  • The minimum transaction must be no greater than £10.
  • Savers must be able to withdraw their money within seven working days or less.

Terms

  • The interest rate must be no lower than two percentage points below base rate.
  • Upward interest rate changes must reflect base rate movements within a calendar month. Downward changes may be slower.
  • There must be no other conditions (for example, limits on frequency of withdrawals).

The standard for stocks and shares ISAs

Charges

  • The total charge must be no more than 1% of net asset value per year.
  • The saver must not pay any other charges.

Access

  • You must be able to put in amounts as small as £500 for a lump sum or £50 a month for regular savings.

Terms

  • Investment may be in authorised unit and investment trusts or in open-ended investment companies.
  • A fund must be at least 50% invested in ISA-qualifying shares and securities that are listed on European Union stock exchanges.
  • Units and shares must be single priced (that is, no separate buying and selling prices).
  • Product literature must highlight the investment risk.

A CAT standard stocks and shares ISA may hold units or shares in one or more funds which meet these requirements. If holding them in the ISA entails any additional features (for example, additional charges), these should be taken into account in deciding whether the ISA meets the standard.

The standard for life insurance ISAs

Charges

  • The annual charge must be no more than 3% of the value of the fund.
  • There must be no other charges (for example, a separate charge for the guarantee on surrender values).

Access

  • The minimum premium must be no more than £25 a month for regular savings, or a £250 lump sum.

Terms

  • Surrender values should reflect, over time, the value of the underlying assets of the fund.
  • There must be no specific surrender penalties.
  • Three years after paying a premium, and thereafter, the surrender value should at least return the value of the premium.

A CAT standard life insurance ISA may hold one or more life insurance policies. If holding them in the ISA entails any additional features (for example, additional charges), these should be taken into account in deciding whether the ISA meets the standard.

A CAT standard life insurance ISA may permit lump-sum savings, regular savings, intermittent savings or any combination of these. The surrender value guarantee applies separately to each premium payment.

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