Even Brits who are sensible enough to save for the future aren't necessarily taking advantage of the tax-free benefits of Individual Savings Accounts (ISAs).
As the end of the tax year approaches, research from Alliance & Leicester (A&L) has found that consumers could be losing out on a collective £424 million through the tax exemption of ISAs.
Although over 70 per cent of Brits now have some form of savings or investments, fewer than half have started an ISA, and many more are concerned with their account's interest rate (88 per cent) than the possibilities of not paying tax on it (55 per cent).
Furthermore, A&L has identified that it is often ISA ignorance that is stopping people from opening ISAs, with 21 per cent saying they don't actually know what it entails.
A similar 20 per cent think they don't have the funds to open an ISA, even though just £1 is required to start saving.
Mike Woodward, manager for savings at Alliance & Leicester, said: "It is disappointing that after seven years, the take-up of cash ISAs is still fairly low. It seems that despite a relatively high awareness, there are still myths and misunderstanding surrounding cash ISAs."
Alliance & Leicester also found that around two thirds (63 per cent) of consumers didn't realise it was possible to open an ISA with a different provider each year. To read more about ISAs, click here.
© Adfero Ltd