6th March 2013
National Savings and Investments says 24 per cent of Britons will take advantage of their full Isa allowance of £11,280 this year. It says 18 per cent will use some of their allowance.
NS&I finds that nine per cent will be put off by interest rates and returns compared with ten per cent last year and thirty per cent in 2010.
The group most likely to use their full allowance are the 55 to 64 year old group with 43 per cent likely to do so.
The number using some of their allowance has increased this year to 18 per cent from 16 per cent last year, and 15 per cent in 2009/10.
However an increasing number of Britons say they will be unable to invest in an ISA at all, saying they cannot afford to. Just under a third of Britons or 32 per cent are not investing in an ISA as they do not have the money to put aside up from from 28 per cent last year.
NS&I says that the demographic of ISA savers has shifted in recent years. Those in the 55-64 age group are now the most likely to utilise all or some of their ISA allowance, at 54 per cent in 2012/13. Last year those in the 25-34 age range were the most efficient ISA savers – with 51 per cent using some or all of their ISA shelter, while in 2009/10 it was those aged 65+ who made most use of their ISA limit, with 42 per cent using some or all of their allowance.
Despite the Bank of England’s base rate remaining at 0.5 per cent and the continued low interest rates across the savings market, only 9% of Britons said they would be put off by interest rates and returns offered by ISAs. This is in stark contrast to the 30 per cent of savers put off by low interest rates in 2009/10.
The research suggests that the understanding of financial products amongst Britons is increasing. Three years ago, as many as 15 per cent admitted to not knowing what an ISA was, however that figure had dropped to 8 per cent last year and now stands at 6 per cent.
John Prout, NS&I’s Retail Customer Director, says: “ISAs are usually the first port of call for people looking to save and it’s encouraging that almost half of us are utilising the tax-free shelter that ISAs provide. With the end of the financial year fast approaching, now is an important time for everyone to review their savings.”
NS&I has also compiled the following advice which it says will help savers make the right choice when it comes to investing in ISAs: