With the ISA tax-free allowance deadline fast approaching on 6th April, research from CapitalRise reveals that an estimated 39 million UK adults could miss the deadline.
In a survey conducted with 3Gem, only 34% of respondents understood the tax benefits of ISAs, although this is an increase from 27% in 2019. A mere 29% were aware that ISAs could be used for investment purposes, while only 14% knew which provider to use for different ISA products.
Account holders can save or invest up to £20,000 tax-free in ISAs every tax year, either in one type or across different products.
Despite the growing popularity of investments among UK adults, 46% of respondents reported not putting any money into ISAs this tax year.
Uma Rajah, CEO and Co-Founder of CapitalRise, emphasised the importance of utilising ISAs as a tax-efficient way of building savings and investments. She said:
“With the new tax year fast approaching on 6th April, time is running out to use this year’s tax-free ISA allowance. It is important to do your due diligence, as there are several types of product that all work differently.”
She urged individuals to explore the various types of ISA products available and ensure their money is working optimally for them, adding:
“At times like these, it is especially important to check your money is working as hard as it can for you. ISAs are a tax-efficient way of building savings and investments, but with today’s findings showing a significant portion of the population is unaware of the key benefits and differences between the ISA types, it is clear that they hold huge untapped potential.”