ISA

What are CAT standards?
The government introduced CAT standards for ISAs. 'CAT' stands for fair charges, easy access and decent terms. Not all managers of ISAs have decided to follow the CAT standards with their plans.

The CAT standards for different types of ISA are:

CAT standard cash ISAs

• There are no charges.
• You can put in or take out as little as £10 with no more than seven days' notice.
• The minimum interest rate you'll get will be no more than two per cent below base rate.

Life investment ISAs

• You can pay in as little as £25 a month, or £250 a year.
• The most you'll be charged to manage your investment will be three per cent of the value of your fund. There will be no other charges.
• When you cash in the ISA, there is no penalty, and if you've had the ISA for at least three years, you should get at least your initial investment back.

Stocks and shares ISAs

• You can pay in as little as £50 a month, or £500 as a lump sum.
• The management charge must be no more than 1% a year of the value of your fund. There will be no other charges.

Many ISAs do not meet the CAT standards but that doesn't necessarily mean they are poor value. For example a cash ISA with a £3,000 minimum investment will not be CAT marked, but could offer a very good rate of interest.

Who offers ISAs?
The government wants ISAs to be widely available, cheap and easy to buy, so you can buy them in lots of places like banks, building societies and supermarkets and from investment fund managers and even the post office.

The government wants ISAs to be widely available, cheap and easy to buy, so you can buy them in lots of places like banks, building societies and supermarkets and from investment fund managers and even the post office.

If you want to take out an ISA, there are a number of ways to do it:

• Contact the ISA provider directly, either through the internet, by calling them, or responding to adverts in papers.
• Speak to an Independent Financial Adviser. You'll find details of your local IFA in the Yellow pages (www.yell.co.uk), or visit www.unbiased.co.uk

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