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New Research Reveals Tax-Free Savings are Wasted through Lack of Understanding

New research reveals a lack of comprehension regarding tax free saving entitlements, our understanding of ISAs and the new investment limits.
Finance - 25 March 2010   Download IconContent available for download:  
Audio | Interview Andy Gray, Head of Savings from Barclays| Login to Download

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Last year, Chancellor Alistair Darling announced in that the annual amount people could save into tax-free ISAs was going to increase from a maximum £7,200 to a new limit of £10,200, £5,100 of which can be held in a cash ISA.

New research shows that despite the changes having been announced in 2009, 42% of savers are still unaware that the new limit comes into force on 6th April this year and will apply to everyone aged over 18.

The research also reveals that 71% of people don’t think they have enough money to open an ISA but are keeping an average of £4000 in current accounts or instant access savings accounts. 70% of people don't know the maximum that they can invest in a cash ISA, meaning that thousands of pounds of tax-free entitlement is likely to be unintentionally wasted as we draw closer to the new tax year.

. Introduction:

New research released today reveals that thousands of savers could be missing out on their tax free entitlement due to a lack of understanding of what an ISA is and how much you can invest into one. 71% of people don’t think they have enough money to open or invest in an ISA and almost three quarters of people don’t know what the new limits will be. The new limit for a full ISA will rise from £7,200 to £10,200 with the cash ISA element increasing from £3,600 to £5,100. However 42% of savers are unaware that the new limits kick in from April 6th and an astonishing 70% don't know what the new cash ISA limits are.

But why is there such a lack of comprehension surrounding ISAs this year?

Joining us in the studio is Andy Gray, Head of Savings from Barclays.

. Suggested Questions:

What does the research reveal about the lack of comprehension surrounding ISAs in our area?

Why are so many people confused about tax-free savings?

What are the tax-free allowance limits?

What are the consequences of not knowing the limits and deadlines?

Do you need to invest in stocks and shares to benefit from an ISA?

Where can we find out more information?