[Breaking] Government Keeps ISA Contract Period and Contribution Limits Unchanged

[Financial News] The revised plan for Individual Asset Management Accounts (ISA), which had faced strong pushback, has effectively been sent back to square one. The government has decided to keep the contract period and contribution limits for general ISAs unchanged, and to allow overlapping subscriptions to the youth-type Productive Finance ISA and Youth Future Savings.
The Ministry of Economy and Finance said on the 1st that it finalized the government proposal for the 2026 tax reform plan at a State Council meeting.
The South Korean government decided to keep the contract period and contribution limits for general ISAs unchanged. The tax reform plan announced earlier had called for creating a Productive Finance ISA while limiting existing general ISAs to a maximum contract period of five years and banning the rollover of the annual contribution limit of 20 million won.
However, criticism grew that the plan could restrict existing subscribers' choices and undermine the compounding effect of long-term investing. As a result, the government decided to keep general ISAs free of contract period limits, as before, and to allow rollover of the annual contribution limit.
Overlapping subscriptions to the youth-type Productive Finance ISA and Youth Future Savings will also be allowed. The original government proposal required young people to choose only one of the two products, but critics said that would limit their options for investing and saving.
Kim Han-kyu, senior deputy floor leader for policy of the Democratic Party of Korea, said on the 13th, "The government proposal forces young people to choose between investing and savings." He added, "Young people should be able to invest part of their income and save the rest according to their own choices."
[email protected] Kim Chan-mi Reporter