Money News
New research from the Nationwide Building Society reveals that 62% of people still don't have an ISA. This follows last week's Budget where, says the Society, the Government failed to introduce additional flexibility to the savings regime to help encourage more people to make use of their ISA allowance.
Part of the reason for the relative lack of uptake is due to the fact that 50% claim not to have enough money to save in an ISA; while a further 18% need to access their money so save elsewhere, despite ISAs being instant access. Meanwhile, 17% claim not to understand them so have opted not to take one out.
Interestingly, the research also shows a third of people who don't have an ISA, save up to £1,000 each year in other savings vehicles. But worryingly, it also reveals that a third of people who don't have an ISA, don't save any money at all.
Matthew Carter, director for savings at Nationwide, says: "It's a concern that two thirds of people do not have an ISA. ISAs were introduced 10 years ago and yet some people still do not understand them or feel they haven't enough money to invest in them.
"We want people to understand that anyone can take advantage of tax-efficient savings, no matter how much money they have to save. It's also important to inform would-be savers, worried that their money is tied up, that all ISAs are instant access."
The Society has previously called on the Chancellor to introduce a withdrawal buffer that allows savers to make withdrawals and replenish their ISA within the same tax year. This would particularly help people on lower incomes and encourage those that need access to their money to open an ISA.
18 March 2008 © Moneyextra.com
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