The research shows that while the average UK saver has £20,000 in savings, those with a cash ISA tend to have considerably more. The average saver with a cash ISA has accrued £42,000 – yet 40% have not made a single deposit into their cash ISA during the current tax year.
While cash ISAs are one of the most popular savings products – with more than 21 million Brits having one – just 16% are taking full advantage by using their full limit.
More than three quarters (77%) of cash ISA holders are unaware that any money paid into a cash ISA counts towards the annual ISA allowance even if it is subsequently withdrawn. Many could unwittingly be missing out as a third (31%) of cash ISA savers have dipped into their account so far.
However, the new rules coming in from the new tax year will give savers greater flexibility by allowing them to dip into their savings and retain the tax break if they replace their funds in the same tax year.
Clare Francis, Savings and Investing Expert at Barclays, commented:
“While it’s encouraging that so many people are able to set aside money for savings, the relatively low number using their full ISA allowance suggests they may not be making their savings work as hard as they could. Average savings are higher the amount needed to fill an ISA, but it appears low levels of awareness around the allowance and how it works could be leaving savers needlessly missing out. However, the good news for those who have not used their full ISA allowance yet this year, is that it’s not too late. They have until 5 April to make use of the 2015/16 allowance and then from 6 April, they will have a new £15,240 ISA allowance which can be used during the 2016/17 tax year.”
