Only four in ten people consider possible tax benefits when they select their savings, Alliance & Leicester has claimed.
The majority of savers, 84 per cent, simply look at interest rates, the study found, while far fewer think of what they could save by avoiding paying tax on their savings.
All non-Isa savings accounts have 20 per cent deducted automatically in tax, the lender warns, rising to 40 per cent among higher-rate taxpayers.
Although mini-cash Isas can be opened with savings of as little as £1, 16 per cent of people surveyed thought they didn't have enough money to open or save in an Isa account.
Meanwhile, one in five people believe the ISA system is too complicated to understand.
But Alliance & Leicester's savings manager, Ross Dalzell, insisted that "Isas are … just as straightforward to set up and manage as any other savings account".To learn more about Isas, click here.
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