ISA holders failing to capitalise
Research from Nationwide Building Society reveals that ISA holders are not making full use of their tax-efficient allowance.
In the current tax year, 28% of ISA holders do not have any more money to save with 4% not knowing how much they topped up.
Nearly one third of ISA holders saved up to £1,000 and one tenth of ISA holders saved between £1,000 and £2,000. One-fifth of ISA holders topped up between £2,000 and £3,000.
Just 8% of ISA holders topped up their stocks and shares ISAs by more than £3,000.
When asked what stops people from saving more in their ISAs, more than half of respondents stated they would like to save more but do not have the money to do so.
Conversely, 10% of people do not want to save any more, suggesting they feel they save enough. Additionally, another 9% of respondents do not save any more into their ISA, as they prefer to keep their savings in an instant access account, despite the fact that all ISAs are instant access.
With 48% of ISA holders intending to save more in their ISA when the revised limits come into effect in April, Nationwide believes more needs to be done to engage savers and would-be ISA holders to ensure they fully understand the benefits of ISAs.
Matthew Carter, director for savings at Nationwide, said: “With just over a week to go before the new ISA limits come into force, work needs to be done to encourage people to make the most of their ISA allowance. With one-in-10 ISA holders opting to save in a regular savings account instead of their ISA, it’s essential that consumers are educated about the benefits of tax-efficient savings and how most ISAs allow instant withdrawals.
“Nationwide calls on all would-be savers to make use of their ISA allowance – with only a week to go until the end of the tax year, now is the perfect time to start saving.”