Few Savers Using UK Stocks And Shares ISAs

By ExpatBriefing.com Editorial 17 March, 2014

Few UK-taxpaying expats and UK residents are using their stocks and shares Individual Savings Account (ISA) allowance each year even though they may provide a higher return than a traditional cash ISA, new research from financial services group True Potential says.

An ISA is a tax-free savings account which may be used by persons who are resident in the United Kingdom for tax purposes. A survey of 2,000 people, commissioned by True Potential, showed that two thirds (63 percent) of respondents are likely to use all or part of their cash ISA allowance this year. This compares with less than one in ten (9 percent) of savers who will invest in a stocks and shares ISA.

The research found that men were twice as likely to invest in a stocks and shares ISA in 2014 compared with women. 72 percent of people aged 25 to 34 years are likely to use a cash ISA compared with 9 percent who intend to purchase a stocks and shares ISA.

Of those with ISAs, 60 percent have never transferred their ISA to another provider, and 46 percent were not aware that under some packages a fixed-rate cash ISA's yield may fall after 12 months.

Managing Partner at True Potential, David Harrison, said: "There are two key issues around savings products. Firstly, that the products most people are comfortable with – cash ISAs and pensions – deliver very poor returns. Secondly, people are suspicious, or lack knowledge, about those products that can deliver better value, such as stocks and shares ISAs or investment funds."

The annual ISA investment allowance was raised on April 6, 2013, to GBP11,520 (USD19,125). Up to GBP5,760 of that allowance can be saved in a cash ISA. The remainder of the GBP11,520 can be invested in a stocks and shares ISA with either the same or a different provider. The Junior ISA investment allowance wasraised to GBP3,720. These allowances are rise again in April.

Tags: Tax | Investment | Pensions | Interest | Banking | Financial Services | Investment Funds | Inflation | Services | Expats |


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