A study by Aldermore revealed that seven out of ten people do not know about the new personal savings allowance (PSA), launching in April 2016, which will mean basic-rate tax payers won’t have to pay tax on the first £1,000 of interest they earn on their savings in a financial year. Higher rate taxpayers will be able to earn £500 of interest tax-free.

The survey of 2,000 adults also found that two-thirds (67%) do not know the Government will be supporting first time buyers through the introduction of the Help to Buy ISA from December.

A further two-thirds (66%) are unaware of the new rules from April 2016 allowing savers to top up their ISAs during the tax year if they have previously withdrawn cash and more than six in ten (63%) aren’t aware the Financial Services Compensation Scheme deposit protection limit is being reduced from £85,000 to £75,000 from 1 January 2016.

Simon Healy, managing director for savings at Aldermore, said: “Our research shows that a worrying majority are not aware of the forthcoming changes that could impact their savings habits. With the introduction of the personal savings allowance, for example, many savers could be better off looking at traditional savings accounts rather than an ISA. Choosing a competitive rate is important, but it is important savers have an understanding of the new types of products as well as changes to the tax system or deposit protection scheme.”

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