Bank accounts vary depending on a person’s financial needs, but Individual Savings Accounts, more commonly known as ISAs, are often seen as a good solution. ISAs allow Britons to save a set amount tax-free each year, and are considered to be excellent vehicles for saving sums of money. In the current tax year, the maximum a person can save into an ISA is £20,000, and with interest rates on other accounts at shocking lows, this option could also provide security.
However, research has found many Britons are actually missing out on the opportunity to save in this way, potentially putting a dent in their savings.
Analysis from the Office for National Statistics showed 78 percent of adults in the UK currently do not have an ISA.
This means over 40million adults may be missing out on thousands of pounds of tax-free saving each year.
But there are a number of reasons why Britons state they do not have this kind of savings account.
But many asked also expressed a lack of financial security, an issue which has undoubtedly been exacerbated for many people amid the COVID-19 crisis.
Steve Watson, Head of Proposition at Cushon, commented on the matter.
He said: “Even though everyone’s financial priorities are different, we still have one thing in common – the need to have savings which are accessible and available.
“We want to help people build financial resilience and reach their savings goals, whether that’s getting the keys to their first home, buying a new car, saving towards retirement or having a financial buffer to fall back on should unexpected circumstances occur.
“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.”
If a person does wish to open an ISA, the process is relatively easy to complete.
The government explains there are a number of places where Britons will be able to access an ISA.
These include banks, building societies, credit unions, stock brokers and other financial institution.
People should contact their provider directly for more information which relates to how to open an ISA.
There are four types of Individual Savings Accounts which are worth bearing in mind.
These are: cash ISAs, stocks and shares ISAs, Lifetime ISAs and innovative finance ISAs.
Britons can put money into one of each kind of ISA every tax year.
People do not need to declare an ISA interest, income or capital gains if they are completing a tax return.