Confusion reigns regarding increased ISA allowances for over 50s
A study launched by Saga has revealed that just 5% of over 50s know what the new ISA limits being introduced on 6 October 2009 will be, demonstrating that the government and the savings and investment industry need to do more to advise people of the increase.
ISA limits are being increased to £10,200 for the over 50s, but worryingly the research conducted by the Saga Populus Panel, the largest research panel of over 50s in the UK, shows that over half (54%) have no idea what the new limits will be. A further two fifths (41%) know the limit is increasing, but did not know by how much, meaning many may not take full advantage of the increase when it is introduced, and as a result miss out on the tax free benefits available. On a more positive note, the research did highlight that two fifths (39%) are keen to top up their ISAs following the change.
To coincide with the increase in ISA limits, Saga Personal Finance said it was introducing new initiatives to help savers and investors make the most of this allowance:
Andrew Goodsell, chief executive, Saga Group, commented: ìISAs are a vital savings vehicle, but clearly more needs to be done to ensure people make the most of the benefits available. We urge the over 50s to take a closer look at their savings and investments and to research the ISAs available to them, especially when the limits are increased on 6 October 2009.”
It appears that there is extensive confusion regarding current ISA limits, with less than two fifths (38%) knowing what the existing limits are, and women less aware of these than men (41% of men know vs 34% of women). People in their early 60s are significantly more clued-up on this than those in their early 50s (29% on 50-54s knew the limit vs 42% of those aged 60-64) highlighting perhaps that those nearer retirement take a keener interest in their savings. Only a third of people could correctly state what the limits are for both cash and shares within an ISA wrapper.
People are not using ISAs to the full, as only a third (38%) of over 50s with ISAs use all of their allowance each year. Those living in Northern Ireland were shown to be the most savvy with their savings, with almost half (44%) using up their allowance, in comparison to just a third (33%) in the East Midlands.
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