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ISA limits remain a mystery

ISA limits remain a mystery

Category: Savings

Updated: 22/03/2010
First Published: 22/03/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Savers' awareness of ISAs is high, but confusion still remains over the new contribution limits, a survey has revealed.

Almost nine in ten (86%) people questioned by Lloyds TSB knew that an ISA was a savings account, with awareness the highest amongst those aged 45 to 54 years.

Encouragingly, around two thirds (62%) of those surveyed also thought that ISAs were a good way to save, as tax was not payable on the interest earned.

In addition, two fifths (41%) of those polled understood that by not paying in the full cash ISA allowance during the year, the allowance would be lost at the start of the new tax year and could not be topped up.

Yet confusion seems to reign when it comes to knowledge of the ISA contribution limits.

Just one in ten (11%) people could correctly recite the current cash ISA limits, with even fewer able to recall what the contribution limits will be at the start of the new tax year.

At present, the cash ISA limits are £5,100 for those born on or before 5 April 1960, and £3,600 for everyone else.

But from 6 April 2010, at the start of the 2010/11 tax year, the limit will increase to £5,100 for everyone over 16.

Amongst the other findings from the survey, a quarter of 18 to 24 year olds could not put their finger on exactly what an ISA was.

An iPhone application topped the list of what they thought it could be instead.

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