Almost 1 in 5 Brits never heard of Stocks and Shares ISA
Almost one in five Brits have “never heard” of a Stocks and Shares ISA, while a quarter say that while they’ve heard of the UK investment wrapper, they don’t know anything about it.
A survey on the struggles of ISA takeup has revealed that 17 per cent of UK adults had never heard of the ISA, according to data from trade body the Investment Association.
Even though most Brits had actually heard of ISAs, uptake is still relatively weak. The survey found only 31 per cent of Brits have a cash ISA, while just 16 per cent have a Stocks and Shares ISA.
The news comes after Chancellor Rachel Reeves confirmed in the Spring Statement that ISA reform was on the horizon, with changes to the regime expected to be announced in the Autumn Budget.
Changes to the cash ISA, including dropping its limit from £20,000 to £4,000, had been rumoured in the run-up to the Spring Statement, but Reeves ultimately abandoned the plans.
“For now, the plans have been kicked into the long grass,” said Interactive Investor analyst Myron Johnson.
The planned reforms to the ISA regime have come largely from a desire for the government to boost the culture of retail investment in the UK, after domestic shareholding has continued to drop across the country.
In addition, campaigns against the cash ISA have noted that £10,000 invested in the wrapper five years ago would have yielded just £8,713 in today’s money due to the eroding impact of inflation, compared to £12,249 for a Stocks and Shares ISA.
When UK investors were surveyed by the Investment Association, only two per cent hadn’t heard of the Stocks and Shares ISA, with the majority understanding that investing in the vehicle could give a better long term-return than a cash ISA.
However, when cash ISA holders were singled out, 22 per cent claimed that they don’t know much about investing, and cash ISAs were “easier to understand”.
The same number said that they didn’t want to risk the value of their investments going down.
Men are twice as likely to have a Stocks and Shares ISA compared to women (21 per cent versus 11 per cent), despite uptake of the cash ISA being split evenly between the two genders, the survey also found.
“Our research has highlighted a significant knowledge gap between those who are already investing and those who are yet to get started,” said Miranda Seath, director of market insights at the Investment Association.
“This means that people across the UK are missing out on the benefits and growth potential investing can bring – and that needs to change.”