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Newsletter

People 'not aware of Isa changes'

By Sarah Engle, Mon 22 Feb 2010 - Published in Banking

People are not planning on taking advantage of the changes to Isa entitlements, it has been found.

Research from financial provider NS&I showed that just 15 per cent of Brits know that tax-free Isa limits will increase to £10,200 per year from April.

The survey also revealed that one-quarter of people think allowances will remain the same in the next financial year, while 24 per cent understand that new limits are planned but do not know when they will be introduced.

John Prout, sales director at NS&I, said: "The fact that all interest earned in an Isa remains tax-free means it's a must-have product for people looking to maximise their hard earned savings. Understanding the allowances and reviewing the terms of the product is vital for savers."

The research also discovered that 35 per cent of people have been put off saving in an Isa because of the low interest attached to them at the moment, while 16 per cent find the products too confusing.

Last week, The Motley Fool director David Kuo claimed that Isas are a good option for people saving for retirement, as there are no age limits on when they can access the cash, unlike pensions.