Two thirds of ISA savers want limits on cash ISAs increased
66% of ISA savers think, that if they could be increased, cash ISA limits should be brought into line with higher stocks and shares ISA limits for all savers, according to research by Nationwide Building Society, which also reveals that many people find the tax-free savings accounts complicated or confusing.
The findings show a majority of people may support Nationwide's call to double the cash ISA limit from £5760 to £11,520, making it the same as the stocks and shares ISA limit. The Society says that not only will higher cash ISA limits benefit savers such as first-time-buyers and pensioners, it will also make the whole ISA system simpler.
This is borne out by YouGov research carried out online on behalf of Nationwide. The research found:
30% find ISA rules confusing
31% find the differences between cash and stocks and shares ISAs confusing - more so than any other aspect
23% say the different rules which apply to different types of ISAs put them off saving into any ISA
In particular, 21% find the annual limits confusing, 24% are confused by the way limits change every tax year, whilst 22% are confused by the timings for when they could invest in an ISA
In fact, 32% don't know what ‘ISA' stands for
Nationwide believes that bringing parity to the ISA limits will make them more accessible and less confusing, thereby helping to encourage a more positive savings culture in the UK. The research showed that people were particularly confused when it came to comparing stocks and shares ISAs with cash ISAs, so it is no wonder most people would prefer saving in cash over stocks and shares for an ISA (61% choose cash).
Nationwide's research also revealed:
81% don't know how much you could save into an stocks and shares ISA compared to a cash ISA
26% say it is unfair that you can save more in a stocks and shares ISA than you can in a cash ISA
22% of people say they would be more likely to save into an ISA if the limits were equalised
Richard Marriot, Nationwide's head of savings, said: "ISAs are clearly popular and an extremely useful way of saving tax-free, but it seems a significant proportion of people are confused by the current rules. This could mean individuals are less likely to use them to save. Making the limits the same for both cash and stocks and shares ISAs would help to simplify them, giving savers more confidence about opening and getting the most out of their ISA. Calling for parity on ISA limits and the ability to transfer from a stocks and shares ISA to a cash ISA is just one of the ways in which we are working to meet our target of empowering 1 million people to start saving by 2017".