Savers Missing Out On Millions
Research estimates savers pay £424m in unneccessary tax by not investing in ISAs
7th March 2006
New research published by banking group Alliance and Leicester estimates that savers are collectively missing out on millions of pounds by not taking advantage of tax-free Individual Savings Accounts (ISAs).
A survey of over 2000 people earlier this year revealed that less than half of those who save or invest have made use of a cash ISA, and that while 88% of people compare interest rates when deciding how to save, only 55% considered tax benefits when making their decision.
Confusion about ISAs is one of the main reasons why people fail to consider investing in them, with 20% of people thinking you could only invest large amounts, when in reality you can open an ISA with just £1. Many also thought that ISAs locked the money away, when many offer instant access.
A&L's savings manager, Mike Woodward said it was 'disappointing' that ISA take-up is still so low seven years after their introduction, but that:
"The key reasons people gave for not having opened a cash mini ISA are all surmountable - in the main, you can open one with as little as £1 and the balance is available for withdrawal at any time. I would encourage anyone who doesn't already have one to take advantage of the tax benefits available."
Read More: A&L Press Release
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