27 June 2014
Older people are best placed to make the most of new ISA limits while younger people remain in the dark about the savings benefits on offer, research by Nationwide shows.
The new ISA regime will allow greater flexibility to take advantage of the tax efficiencies of ISAs from 1 July, with a higher annual allowance of £15,000 and a new ability to transfer from stocks and shares ISAs to cash ISAs. The measures were announced in the Budget following a successful campaign by Nationwide to equalise the allowances for cash ISAs and stocks and shares ISAs.
Yet with the key changes only days away, many people still remain unaware of what ISA savings options are available to them, according to the research conducted by YouGov for Nationwide.
The poll throws light on the contrasting awareness of the new rules between older and younger people, both of which will benefit from the new rules. Many older people will be able to increase their tax-free savings as they approach retirement, while the younger generations can benefit from tax-efficient savings to save for big milestones such as saving for a mortgage deposit, car or wedding
Only a third (34%) of 18-24-year-olds said they were aware that the annual ISA allowance will rise to £15,000 at the start of next month. This compares with more than half (52%) of those aged 55 and older.
Other findings included:
- Less than a quarter (23%) of 18-24s knew that you will be able to transfer a Stocks & Shares ISA to cash from 1 July. This compared to 30% of those 55 and older
- Just 28% of 18-24s knew they could save the full annual ISA allowance for that year across any combination of Stocks and Shares ISA and Cash ISA, compared with 46% of over 55s
Richard Napier, Divisional Director, Savings and Mortgages at Nationwide Building Society, said: “With just a few days to go until the new ISA rules come in, we’re keen to raise awareness of the changes, so that customers are able to make the most of their ability to save tax free.
“Some people may be saving but not through an ISA, which means they are losing out by not opting to save tax free. Many others are unaware that they can save in both stocks and shares and cash ISAs, and that the allowance across the two can be spread as customers wish up to £15,000. This lack of clear understanding of the options that are now available means that customers could be losing out, when they could be making the most of the greater ISA freedoms that are now available.”
Almost two fifths of those surveyed (39%) have indicated that they have made no ISA investments so far this year, and roughly the same amount (42%) have no savings in either a cash or an equity ISA.
Notes to editors:
*All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,372 adults. Fieldwork was undertaken between 30th May - 2nd June 2014. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
Full details of Nationwide’s savings accounts
About Nationwide Building Society
Nationwide is the world's largest building society as well as the second largest savings and mortgage provider in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million customers.
Customers can manage their finances in a branch, via the mobile app, on the telephone, internet and post. The Society has around 17,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.
Customers can manage their finances in a branch, on the telephone, internet and post. The Society has around 16,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.