More than half of UK adults say they do not understand the rules regarding individual savings accounts (Isas), something which could be hitting them in the pocket.
Research conducted by Opinium on behalf of SavvyWoman shows that 56% of consumers are confused about what you can and can’t do with an Isa. These people could be leaving their savings languishing in a low paying account and missing out on higher rates of interest.
Worryingly, 9% of adults wrongly believe that you can only move money if your total balance remains below the Isa threshold for the current tax year.
Just 24% of adults surveyed understood that you can transfer any money from previous tax years into a current Isa.
Women were also less likely than men to understand the rules, the survey found.
The Isa limit for the 2016/17 tax year is £15,240 and this will increase to £20,000 for the 2017/18 tax year, which begins on 6 April 2017.
Only one-fifth of people were aware that the Isa limit is increasing to £20,000. Around a third (36%) gave an incorrect answer to this question and 43% did not know at all.
Sarah Pennells, founder of SavvyWoman, says: “Interest rates are so low at the moment, but some banks and building societies are paying significantly more than others.
“You’re more likely to be on a paltry interest rate if you’ve had your cash Isa for some time, so shopping around and transferring is really important. Many thousands of Isa holders could be missing out because they don’t know that they could move their cash Isa to get a better rate.”