Over 27 million adults in the UK are failing to take advantage of the tax break on savings offered by Isas, despite 76 per cent being aware of them, says new research.
Almost two fifths of all adults proved themselves hazy on the details of Isas however, with 38 per cent saying they didn’t realise that money could be accessed at any time.
Almost two thirds did not realise that Isas can be opened with as little as £1, and five per cent thought that £3,000 was needed to open an Isa account – this is actually the maximum that can be deposited during the first year.
“At Abbey, our biggest concern is the fact that the majority of people aren’t getting the full benefit of tax-free savings because they don’t fully understand Isas,” said spokesperson Pak Chan.
“As an industry, we need to work harder to highlight the fact an Isa can be opened with as little as £1 and that money can be withdrawn without charge.
“We also want to encourage people to make sure an Isa is their primary savings account regardless of how they manage it. A tax free interest rate of 4.6 per cent is worth 5.78 per cent to a basic rate tax payer so it’s well worth having one.”
The wide range of Isas available mean that there is sure to be an Isa suitable as the best savings account for everybody, said Abbey.
© Adfero Ltd