In a survey of 2,000 UK adults conducted by CapitalRise and 3Gem earlier this month, just a third (34 percent) understood the tax benefits of ISAs, up from a quarter (27 percent) in 2019 when CapitalRise conducted a comparable survey.
This year, only 29 percent knew that ISAs could be an investment, not just a savings tool, while just 14 percent of respondents knew which provider to turn to in order to open different product types (cash, stocks and shares, lifetime and innovative finance).
Crucially, ISA account holders can save or invest up to £20,000 tax-free every tax year (April 6 to April 5), keeping the full amount in one type of ISA or split across different products.
Despite ISA popularity marginally increasing, they still remain highly underutilised as both a saving and investment tool. Almost half (46 percent) of respondents report that they did not put any money into ISAs this tax year.