A quarter (24%) of ISA savers are unaware there is a tax deadline for their yearly ISA allowance, says Charles Stanley.
The lack of awareness around the ISA deadline on 5th April means thousands of savers could be missing out on accruing tax-free interest on their savings, the firm warned.
Young savers were more likely to be unaware of the deadline to maximise their £20,000 yearly allowance, with 31% of Generation Z and 27% of millennials unaware, compared to 22% of Generation Z and 11% of Baby Boomers.
Charles Stanley said even those who have built up their savings pot to more than £20,000 were in the dark. More than one in 10 (13%) who have more than £20,000 in savings are not aware there is a tax deadline for their yearly allowance, while 21% of those with savings between £15,001 and £20,000 are also not aware.
Rob Morgan, chief investment analyst at Charles Stanley, said: “ISAs have many benefits for savers and investors; they’re tax-efficient, easily accessible, can be used for short- and long-term goals, and can also be used as a bridge for retirement savings. They’re the Swiss army knife of financial planning and can be used for nearly everyone’s needs and priorities. Yet there are clearly many who don’t know about the ISA deadlines in place. This raises concerns over how many are taking true advantage of their ISA allowance to maximise their savings and build superior compound gains.
“With rumours having also floated around that the Chancellor could make changes to cash ISA limits, it’s even more important that consumers don’t let their savings sit idly and ignore this year’s deadline.”
Charles Stanley said that when thinking about ‘ISA season’ – the run up to the ISA deadline – 28% of ISA holders say it prompts them to top up their cash ISA so their savings are protected, while 20% top up their investment ISA. Just over one in six (17%) say their adviser encourages them to contribute more to their ISA, however, 18% say they cannot fulfil the full ISA allowance so don’t pay in any more than they need to.
A similar proportion (15%) say that ‘ISA season’ has no impact on them, whether that’s referencing their overall savings behaviours, utilising the full ISA allowance, or thinking about the yearly deadline. A third (34%) of ISA savers say they continue to pay into their ISA as usual on a regular basis.
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