According to a recent poll of Moneywise.co.uk users, 24% of the people who took part have no plans to take advantage of their tax-free savings allowance in the 2018/19 tax year.
Some 10% of respondents say this is because they don’t have enough savings to open an Isa, while 14% believe their money would be better off in a different type of savings account or in Premium Bonds.
However, more than three-quarters (77%) of readers say they will be opening an Isa in the current tax year, which runs from 6 April 2018 to 5 April 2019.
Of these, the majority plan to put their money into a Stocks and Shares Isa, with 32% expecting to open one this year. These accounts have become more popular in recent years, as interest rates on cash accounts have remained at rock-bottom and savers look to try to grow their money.
Some 1.6 million fewer Cash Isas were opened in the last tax year compared to the year before and the amount of money saved into them was down 33% or £18 billion. However, 26% of people still plan to open a Cash Isa this year.
Others are looking to alternative solutions to try to boost their returns. Some 4% say they will put money into an Innovative Finance Isa this year, a type of investment account that allows you to invest in peer-to-peer loans.
These accounts only launched in 2016 and take-up so far has been subdued, with just 2,000 of the accounts opened last year and a total of £17 million invested through them – a tiny fraction of the £62 billion put into Isas in total over the year.
Around 1% of respondents say they plan to put money into a Junior Isa this year. Parents and grandparents can save up to £4,260 into a Junior Isa for children this year, into either a cash or investment account. The child will not be able to access the money until they reach 18. Last year, some £62 billion was poured into these accounts.
Meanwhile, 1% of savers will opt for a Help to Buy Isa and 1% for a Lifetime Isa (Lisa). These accounts let you save up to £3,000 and £4,000 a year respectively and get you a 25% top-up from the government. Money saved into a Lisa must either be used to buy a first home or may not be accessed until you are 60. Itis open to savers aged 18 to 39.
Some 12% say they will put their money into a mixture of Isa accounts.
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