Savers investing in cash ISAs feel confused about how to get the most from their money, according to research from money.co.uk
A survey of more than 2,000 adults was carried out by Money.co.uk this month after watchdog Consumer Focus launched a cash ISA super-complaint because they believe customers are being left in the dark by their banks and building societies about what their ISA is doing for their savings.
The results revealed that only 15 per cent feel their providers have been effective at keeping them informed of changes to interest rates on their tax-free accounts, to help them get the most from their investments.
It also showed that consumers are failing to manage their cash ISAs and make sure they pay good rates of interest, because they don’t know what’s on offer.
And with news that up to 83 per cent of cash ISA’s are paying virtually no interest, with rates as low as 0.1 per cent, it is more important than ever for savers to know where the best deals can be found.
Money.co.uk managing director, Chris Morling, said: “This confusion and perceived lack of information is a real problem as many of the cash ISAs that advertise 'headline grabbing' returns rely on introductory bonuses to temporarily inflate their rate. Once these come to an end, savers can find themselves unwittingly earning as little as 0.05%.
“The average return on cash ISAs now stands at 0.41% because so many have funds languishing in accounts paying so little in the way of interest. As Consumer Focus rightly pointed out, the current system just isn't working.
“Clearly the majority of cash ISA customers need more help and advice if they are to make the most of the tax free savings opportunity that cash ISAs provide - help they do not feel they are getting from providers.”
The survey also highlighted that almost three million cash ISA customers do not know how to transfer funds to new products and only 8 per cent feel their provider has kept them informed about new ISAs paying better rates of interest.
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