The research has also revealed a general lack of understanding over the different types of ISA that are available, and particularly a lack of understanding of stocks and shares ISAs.
There was a generally positive reaction to the announcement of the changes to ISA rules coming into effect on 1 July, which increase the annual ISA limit to £15,000 and introduce much more flexibility over how it can be invested. However, with the new rules about to come into effect, four in ten people said they still did not understand the upcoming changes. Understanding among those who do not already have an ISA was even lower, with just one in three understanding the changes.
In addition, two thirds of people (67%) said the changes on 1 July would make no difference to how likely they were to take out an ISA, or increase the amount they have in an ISA, perhaps reflecting the lack of understanding of what is changing.
The research shows 43% of people do not understand the difference between cash ISAs and stocks and shares ISAs, despite the fundamental differences between the two. The level of understanding for people without an ISA currently is even higher, with 66% admitting that they don’t understand the differences.
Anthony Mooney, Director of Financial Services at Virgin Money said:
“The imminent changes to ISA rules are really positive for savers, enabling them to invest more money tax-efficiently and providing increased flexibility on how their money is invested. However, it’s clear that a large proportion of people don’t understand the different options available and what the new rules mean for them, which will put many people off. People shouldn’t invest in things they don’t understand, and we want to help open the door for more people with our straightforward products and latest ‘3 Minute Money’ video, which we hope will prove to be a helpful tool.”
