Of the 2,000 people surveyed, almost half (47%) said they are confused by the rules associated with ISA accounts, over two fifths (44%) said they didn’t know what the maximum amount is they could put into an ISA and over a third (36%) didn’t know what the new Personal Savings Allowance (PSA) was.
The research revealed a clear lack of understanding on the savings landscape, one in five people admitted they didn’t save at all (19%), with one in ten of this group stating it is because they don’t understand enough about the different types of savings products (10%).
The research also shows that it’s not just savings rules that are confusing the nation, a fifth (22%) stated they didn’t know how ISA differed from standard savings accounts, and surprisingly one in ten (10%) said they didn’t even know what the acronyms ISA or PSA stood for.
Kris Brewster, Head of Products at Skipton Building Society, says:
“It is clear from our research that the nation is confused when it comes to saving. With the different types of savings accounts out there it seems that this confusion is not only preventing people from making the most of their tax free savings options, for one in ten, it’s a barrier to saving – full stop.
“And with the introduction of the new PSA this week and the Lifetime ISA, which the government has introduced to encourage people to save for the future, we believe these will add only more confusion and concern for consumers. The savings landscape is becoming too complicated, especially with multiple types of ISA products.
“At Skipton Building Society, we’d encourage the government to think about really helping savers by ending tax on all savings interest, and in doing so, abolishing the need for ISAs, putting an end to this confusion and creating a nation of lifetime savers.”
The Age of Saving
It seems the younger generations are the more savvy when it comes to savings knowledge, as half of the people surveyed aged 18 – 24 knew what a PSA was, compared to the 74% of people aged 45 plus who didn’t.
Over 80% of people aged 45 and over said they were not clear if they could invest in multiple ISA during each tax year. And 40% of this age group didn’t know what the maximum amount is that they could put into an ISA.
Kris Brewster added “To help our customers at Skipton, we’ve created a whole range of helpful content available through our branches and online at our Savings Hub, available at www.skipton.co.uk/savings
“Here savers can find easy-to-digest information and bust some of the common myths around products like ISAs to help them to make informed decisions about the best way to plan for life ahead and make the most of their savings.”
Saving Confusion across the Nation
The research showed some regional variations when it came to savings knowledge across the nation, with over half (53%) of people in Yorkshire and the Humber admitting they didn’t know what the ISA rules are.
When compared to any other region, more people in the South West didn’t know what the acronym ISA stood for and over two fifths (46%) didn’t know what the PSA was.
Over a fifth (21%) in the North West said they were confused on what the actual difference is between an ISA and PSA