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In 1999, the euro currency arrived. Bill Gates became the world’s richest person when his wealth briefly surpassed $101bn thanks to the value of Microsoft stock. Tony Blair was reshaping Britain as ‘Cool Britannia’. The music industry changed forever when a new downloading service called Napster arrived; and the savings industry was having a mini cultural revolution of its own as Gordon Brown introduced Individual Savings Accounts.

While few may remember Napster today, it marked the start of huge changes for the music industry in terms of distribution and purchasing processes. Its legacy lives on as millions of us enjoy digital music today. So much has changed in the music industry – traditional formats like Long Play (LP) almost perished, CDs became useful but ultimately cumbersome, and digital streaming services have since reigned supreme.

Hardcore record collectors and independent stores played a key role in vinyl’s survival, but innovative start-ups revolutionised the music industry. Now, millennials tend to digest music totally differently to Baby Boomers. Rather than ‘own’ whole albums, they stream songs and listen to track playlists. This approach moved the balance of power away from multinationals to musicians themselves. Fans now engage directly with products and curate their collection as they wish.

I see parallels between the music industry and today’s ISA market.

Firstly, in terms of variety. The ISA introduced in 1999 comes in different formats (cash, stocks and shares, innovative, lifetime, help-to-buy, junior). I’m not sure if they will all stand the test of time (anyone remember the MiniDisc?).

Secondly, in terms of how technology has enabled disrupters to radically simplify how we manage our money – digital tools offer access wherever and whenever. But some traditional financial services providers have yet to fully embrace this opportunity, leaving the door open for disrupters to get ahead.

So, what can we learn from the music industry when it comes to ISAs?

The ISA turned 20 on 6 April 2019, yet despite its flexibility, variety and tax benefits (shielding money from the taxman) take-up is declining among younger generations[1]. Perhaps this shouldn’t be a surprise, given how many (arguably more exciting) things are happening just when they can apply for one (age 16 for a Cash ISA, age 18 for other types).

The ISA faces so much competition for attention, yet small savings made young can have big benefits later in life. Making ISAs more accessible and relevant to young people is vital if we are to stand any chance of continuing the legacy of ‘saving for tomorrow’ as a key money skill. 

ISAs are a tidy saving solution for the Child Trust Fund generation – another of Gordon Brown’s saving initiatives. Millions of 18-year olds will see a windfall soon as their Child Trust Fund matures in 2020. While the value of some accounts may be modest, others will be significant. BMO estimates the first windfall wave will be £4.7bn.

The ISA is a truly inclusive product. Not only is it interest tax free, income tax free, and capital gains tax free, but Cash ISAs offer access to funds as easily as regular savings accounts. It’s hard to argue with its simplicity if you are saving in cash or investing already. They make a brilliant default savings account for so many people.

This anniversary seems like a good opportunity to reassess how the nation saves and invests in general, but specifically to check how ISAs are pitched to younger people and ask:  how can we make ISAs fit for purpose for the next 20 years?

Clues may lie in a few areas – starting with the adoption of digital money apps, which have empowered many people to manage their money more actively. Today, Open Banking has done for finance what Napster did for music in 1999. It is revolutionising how people track and manage their finances like never before.

Getting to grips with budgets and spending is a vital starting point, and whilst digital apps play a huge role, I argue that financial education[2] is critical to ensure future generations understand the value of saving from an early age. Encouraging them to invest for the long term requires an understanding of the difference between saving and investing and the pros and cons of both. You may not get all your money back when investing, but equally cash is not always king when you add inflation over the longer term

Secondly, let’s not underestimate the importance of simplifying language. Brits love acronyms but jargon is unhelpful when it comes to finance, which is complicated enough.

Take the ‘Stocks & Shares ISA’. It sounds too complicated. The name suggests you must understand the underlying ‘stock’ or ‘share’ but this isn’t quite true. You need to (a) understand ‘investing’ and (b) appreciate you can pick funds aligned to your own lifestyle ethos, then let the funds work for you. Returning to the music analogy – get your playlist right then chill out, but there is nothing stopping you changing your tunes if life changes and you want a different pace.

Lastly, younger generations have a clear desire to use their money for positive social purpose.  Responsible investing and ethical products are now in sharp focus. Whether you want to screen-out certain investments or invest in particular sectors (such as renewables), there are many ethical options available.

I think the finance industry will do well to see how other industries are driving long-term behaviour change. We must look holistically at young savers and investors lives, to better understand what’s driving their behaviours and decisions.

Of course, developing financial products takes time and big changes don’t happen overnight in regulated sectors, for good reason. But 20 years seems long enough to gauge whether something works for a certain group. Perhaps now is the time to design new savings products for the future.

I’ve highlighted how the music industry adapted, with technology being a key driving force. I think a similar revolution is due for the savings and investment industry – with ISAs centre stage. After all, if savings options look the same in 2039, and ISA uptake remains flat among young people, the financial services industry will only have itself to blame.


[2] 85% of people wish that they’d been taught more about money management at school or university.



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The value of your investments can go down as well as up, and you may not get back what you originally invested.


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