With the rising cost of living and effects of fiscal drag, can savers really afford to overlook the tax benefits ISAs offer?
Many savers may be unnecessarily paying tax on their hard-earned cash, with more than a third (35%) of adults confessing to not holding an ISA. This is according to the second annual Savings Index from high street bank, NatWest, which uncovered a worrying lack of understanding surrounding the tax-benefits ISAs can offer.
In particular, younger adults demonstrated limited knowledge of ISAs and their financial advantages, with “more than a fifth unaware of any ISA product”, said Mo Watt, Customer Journey Manager at NatWest. Less than half (41%) of those aged 18 to 24 had an awareness of cash ISAs compared with 73% of all respondents; meanwhile, 37% of younger adults were aware of stocks and shares ISAs compared with 60% of all respondents.
But, with savings accounts still offering higher interest rates than in previous years, Income Tax bands set to remain frozen until at least 2028 and the rising cost of living, can savers afford to overlook opportunities that could potentially reduce their tax burden?
