Utilisation of ISA Allowances Remains Low Among UK Savers

Recent findings from easyMoney show that only a fraction of UK residents are fully taking advantage of their ISA allowances, with a significant portion unaware of the new investment opportunities provided by the government, such as the British ISA.

A survey conducted by easyMoney, which involved 1,079 UK participants, discovered that during the last tax year, only 39% made use of their tax-free ISA allowance. Furthermore, a notable 61% did not invest any money into an ISA at all. Out of those who did invest, 23% contributed some amount, while only 16% reached the maximum limit of £20,000. These statistics highlight a cautious or constrained approach to saving within ISAs among the British public.

Economic Challenges Impact Savings
The survey results indicate that the primary barrier to maximising ISA contributions is the lack of disposable income, attributed to the ongoing cost of living crisis. This has significantly affected people’s capacity to save for the future. Looking ahead, 75% of respondents have no plans to maximise their ISA contributions in the current financial year, with 83% citing financial constraints as the reason.

Awareness and Reception of the British ISA
Despite the introduction of the British ISA in the government’s Spring Budget—offering an additional £5,000 tax-free allowance for investments in British equities—57% of survey respondents were initially unaware of it. Even after becoming informed about the new ISA, 81% expressed no intention of investing in it. Jason Ferrando, CEO of easyMoney, commented on the situation, stating, “ISA investment is a great way for people with all sorts of levels of wealth to make their money work for them, but for most people nowadays, disposable income is really hard to come by. And at times like this, investing and saving is very much a luxury, so it’s little surprise to see many people tuned out of the ISA investment world.”

Ferrando also noted that while the additional tax-free allowance and diversification of the ISA offering are positive developments, initial uptake appears limited. This reflects broader challenges facing UK savers in the current economic climate, where investing remains a secondary priority to immediate financial needs.