Martin Lewis advises savers on best accounts for large deposits
ISA accounts allow savers to put money away which will then be free of many tax costs. For the current tax year, the maximum that can be saved into ISAs is £20,000.
While the tax benefits can be substantial, analysis of the latest figures from the ONS revealed around 78 percent of adults in the UK do not have an ISA.
This means over 40 million individuals are potentially missing out on tax-free savings every year.
Of those without an ISA, Cushon research amongst 2,000 respondents found that 22.78 percent believed they do not save enough to make it worth having one and 21.45 percent want their money to be instantly available when they need it.
Additionally, 13.30 percent detailed they didn’t want or need one and 10.81 percent said they don’t understand ISAs so, therefore, haven’t opened one.
We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.
Paradoxically, the same research found 42.32 percent of individuals said they do not have enough savings to feel financially secure with 31.11 percent citing that they don’t have enough disposable income to build a sufficient level of financial resilience.
Previous research conducted by Cushon also showed 78 percent of UK adults across all age groups agree that the Covid-19 pandemic has made them realise that having accessible savings is very important.
Of those who are in a position to be saving money, 40 percent were putting cash aside so they have something to fall back on should the worst happen.
Steve Watson, the Head of Proposition at Cushon, commented on the findings: “Even though everyone’s financial priorities are different, we do still have one thing in common and that’s the need to have savings which are accessible and available.
Martin Lewis urges savers to ‘fight for every scrap of interest’ [EXPERT]
Savers need up to £13k set aside for emergencies – get ready for 2021 [INSIGHT]
GDP: Savers to struggle ‘with or without a vaccination programme’ [WARNING]
“While the majority of adults don’t have an ISA, this can be remedied through better and wider financial education to help people understand and make informed decisions about their finances and what is best for them.”
Fortunately, while many people may not have an ISA, it will be easy for them to set one up as the accounts can be opened with several institutions.
ISAs can be opened with the following:
- building societies
- credit unions
- friendly societies
- stock brokers
- peer-to-peer lending services
- crowdfunding companies
- other financial institutions
Currently, there are four main types of ISA, which include:
- cash ISAs
- stocks and shares ISAs
- innovative finance ISAs
- Lifetime ISAs
Tax will not be paid on any interest levied on cash, income or capital gains from investments.
Junior ISAs can also be opened for children under 18.
These have a yearly deposit limit of £9,000.
Parents of the children being saved for can manage the account but the money will ultimately belong to the child.
The child can take control of the account when they turn 16 but they cannot withdraw the money until they turn 18.
Source: Read Full Article