Government Research confirms appeal and suitability ISA for modern saving
Government Research confirms appeal and suitability ISA for modern saving
The quantitative research published by HM Treasury and HMRC todaysupports a number of assertions TISA has made in recent years regardingthe ISA’s use for savers in every walk of life. The ISA’s appeal islargely due to consumers’ familiarity with the scheme, its flexibility,and increased appeal for long-term savings.
ISAs are well known to most consumers; a widely recognised brand forsaving. Even amongst those who are not currently saving in ISAs, only6% claim to have never heard of ISAs and only handful said that ISAsare too complex.
When asked what kind of savings and investments they hold, ISAs are thefourth-most popular after: current accounts (85%), cash deposit savingsaccounts (58%), and property (43%). In the study, more people reportholding ISAs (39%) than pensions (37%).
ISAs are flexible and allow savings as and when savers are able. 25% ofrespondents in the Government’s survey make multiple payments per year,while just under 20% make a single lump sum each year. 27% have madeonly one payment when they opened the account.
ISA savings are long-term savings. 60% of ISA holders have neverwithdrawn the money and over three-quarters (76%) have made either 0 or1 withdrawal.
While ISA savers have a number of motives for saving, the most commonare to accumulate funds in a tax-incentivised wrapper, to have moneyfor a ‘rainy days’ and emergencies and money for no purpose at all. Ofthose where a specific purpose was given, retirement funds ranked thehighest.
The survey reveals that when respondents were asked about therelationship between their ISA and pension savings, 60% are using thesevehicles in tandem, while a considerable number, 30%, reported savingin ISAs instead of pensions. (TISA always recommends that consumerscontact their financial adviser to determine what will best suit theirspecific circumstances.)
TISA Director General Tony Vine-Lott said,
‘This survey by the Government is extremely interesting reading. Itconfirms much of what we have known from anecdotal evidence foryears—ISAs are an increasingly popular savings vehicle that reallyappeal to the consumer. They are well known, allow savings for amultitude of purposes while allowing flexibility that many consumersfind useful, and are increasingly fulfilling a long-term savings need.
We anticipate that the utility and benefit of ISAs will spread to aneven wider base of savers as the Government’s reforms to the ISA regimetake effect from April 2008.’
For more information, please contact:
Jacob Coy, Cicero Consulting
+44 7900 392 531 or jacob.coy@cicero-europe.com
Tony Vine-Lott, Director General of TISA
+44 1372 374 728 or 0790 006 108