New research from Lloyds TSB shows that whilst the majority of people are aware of ISAs, the change in ISA limits is causing some confusion.
Key research findings:
- Just a tenth (11%) know what the current Cash ISA limits are. (NB. The current Cash ISA limits are £5,100 for those born on or before 5th April 1960, and £3,600 for everyone else.)
- Less than a tenth (9%) know what the new Cash ISA limit will be on 6th April 2010 at the start of the new tax year (NB. on 6th April 2010, at the start of the new tax year, the limit will increase to £5,100 for everyone over 16.)
- 86% of people know that an ISA is a savings account.
- Just half of people (49%) are aware that ISA stands for Individual Savings Account.
- Almost two thirds (62%) recognise that ISAs offer a tax free savings allowance.
- 86% know that an ISA is a savings account. The age group who are most aware are those aged 45 to 54 years (95%). A quarter (25%) of 18-24 year olds are unsure what an ISA is, with an iPhone application topping the list as the most common misconception (6%). Although the majority of respondents are aware an ISA is a savings account, only half (49%) could correctly identify that ISA stands for Individual Savings Account. A fifth (22%) think it stands for Instant Savings Account, whilst a tenth (9%) think it is an Investment Standards Agreement. Almost two thirds (62%) think Cash ISAs are a good way to save as tax is not payable on the interest earned in an ISA, but 7% wrongly think there is no limit on how much you can save in a Cash ISA. If you don’t use it you lose it.
- Two fifths of respondents (41%) understand that if you don’t pay in the full Cash ISA allowance during the year, you lose this allowance at the start of the new tax year and cannot top up previous years allowances (NB. ISA savers have only three weeks left to make sure they use their full 2009/2010 tax year allowance).
For more information about ISAs, read the HM Revenue & Customs leaflet Individual Savings Accounts.
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