The impending changes to ISA entitlements are confusing many Brits, according to National Savings & Investments (NS&I), as only 15 per cent of savers say they understand the new limits.
Research by NS&I has revealed that a quarter of Brits incorrectly believe the ISA allowances will remain the same in the new tax year, when in fact the limit will increase from £7,200 to £10,200 for a stocks and shares ISA, while the cash ISA limit will be raised from £3,600 to £5,100.
Meanwhile, 24 per cent of Brits have admitted to being aware of the forthcoming increases, but are unsure what these will be, while one in 10 people wrongly believe that over 50s will only benefit from the increased ISA limit.
In addition, NS&I has found that it is not just the changes in the ISA entitlements that Brits are unsure of, as 16 per cent admit to finding ISAs in general confusing and as a result avoid investing in them.
Commenting, John Prout, sales director at NS&I said: "Understanding the allowances and reviewing the terms of the product is vital for savers. With less than two months to go until the end of the tax year, there is no time like the present for everyone to check their finances and plan to benefit from tax-free savings."
Whilst NS&I's findings suggest there is some confusion surrounding ISAs, it also indicates that many people who are aware of them have chosen not to invest in them for various reasons.
For instance, over a third of people said they had been put off by ISAs because of the low current rates on offer, while 31 per cent claim the current economic climate has led them to look at other types of investments.
Of those who are planning to invest in ISAs in the new tax year, 29 per cent said they are not planning to utilise their full allowance.
Encouraging savers to take full advantage of the tax wrapper that an ISA can offer, Mr Prout added: "The fact that all interest earned in an ISA remains tax-free means it's a must-have product for people looking to maximise their hard earned savings."
© Fair Investment Company Ltd
