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12 Mar 2014

54% Of Britons Plan To Save Into ISAs In 2014

Although individual savings accounts (ISAs) are still the most popular savings option, the number of Brits planning to put their money into ISAs this year has dropped. The main reason for this, experts say, is that many are put off by low interest rates, among other financial concerns.

According to a recent survey by price comparison site uSwitch, 54% of British adults plan to invest in an ISA this year, 9% lower than a year ago. About one in ten people cited low interest rates as the main deterrent and many felt that putting their money into an ISA was not worth the effort. For about 43% of British savers current accounts are where they invest their savings, the poll revealed.

Over the past 12 months, ISA rates have dropped from 1.87% to 1.64%, causing many people to give up on the idea of putting money aside in an ISA, uSwitch said. And the falling number of people saving into ISAs also means that fewer Brits will take advantage of tax-breaks. In fact, a total of £191 billion tax-free savings has been lost.

But the poll reveals that even those who are still planning to save in ISAs are reducing the amount of money they are putting aside. On average, savers will add £121 less than last year to their savings, with just over one in three planning to use their full ISA allowance of £5,760 for a cash ISA, or £11,520 for a stocks and shares ISA.

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