ISAs remain popular despite confusion over increased allowance
Research carried out by Leeds Building Society, has shown that tax free ISAs remain popular with customers looking to maximise their tax free savings. The key findings are:
ISAs remain popular
95% of respondents had a cash ISA
2010 / 2011 Tax Free allowance
60% of respondents knew their 2010 / 2011 tax free allowance
69% claimed that they had invested their full 2010 / 2011 tax free allowance
ISA product
68% of those who had an ISA had chosen a fixed rate product
23% of those who had an ISA had chosen a variable rate product
2011 / 2012 Tax Free allowance
77% of respondents said that they planned to invest in an ISA in the 2011 / 2012 tax year
Only 26% of respondents knew that the 2011 / 2012 tax year allowance was £5,340
Commenting on the findings, Kim Rebecchi, Leeds Building Society's Sales and Marketing Director said, "We know from our own experience that ISAs are very popular and it is no surprise that 95% of people hold this type of account. What is interesting is that around a third of customers surveyed do not know the amount of their annual tax-free allocation.
"Clearly, a guaranteed fixed return delivers peace of mind and almost 70% of ISA account holders have chosen this type of account. This matches our experience, although we do offer instant access, without notice or penalty at any time, to a portion of the funds invested in our fixed rate ISAs and, therefore, this may increase the number of fixed rate ISA customers at Leeds Building Society.
"The most surprising findings relate to the 2011 / 2012 tax year. Only 26% of respondents knew that the 2011 / 2012 tax year allowance had increased to £5,340. Furthermore, only 77% of respondents planned to invest in an ISA after 6 April this year, an 18% decrease from the current tax year.
"This could be as a result of savers feeling the squeeze of the current economic climate or that they are looking for greater returns in this historically low interest rate environment. Whatever the reason, I would urge customers to maximise their tax free savings wherever possible."