In 2018-20, 1-in-2 (54 per cent) working-age families in the top 10 per cent of the income distribution had an ISA, compared to less than 1-in-5 (18 per cent) in the bottom 10 per cent. [...] ISAs are a poorly targeted policy and overwhelmingly benefit the better off ISAs tend to provide the most support (via tax relief) to those on the highest incomes, as this group are more likely to have ISAs and tend to have larger ISA savings pots. [...] For instance, in 2018-20, 1-in-2 (54 per cent) working-age families in the top 10 per cent of the income distribution had an ISA, compared to less than 1-in-5 (18 per cent) in the bottom 10 per cent. [...] Unsurprisingly, ISA holders with the highest incomes were more likely utilise the full £20,000 allowance: 38 per cent of ISA holders with incomes above £150,000 maxed out their ISA allowance in 2020-21, compared to just 6 per cent among ISA holders with incomes of £20,000-£29,000. [...] Despite the evidence that ISAs have not been effective, the Government is doubling down on this approach The Government appears to be doubling down on these tax breaks by announcing the introduction of the ‘UK ISA’ at the Spring Budget.
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