Saga calls for Isa simplification

Saga calls for Isa simplification

Only 8 per cent of people aged 50 plus realise the new Lifetime Isa is only available to people under the age of 40, according to research from Saga Investment Services.

A survey of 9,998 people aged 50 plus commissioned by Saga found a low level of understanding of the Isa system.

Saga Investment Services is now using these findings to call for a simplification that would allow a single Isa account for all ages.

Article continues after advert

Saga Investment Services found most people aged 50 plus did not know that Cash Isas were available at 16 or that an investment Isa started at age 18, while 51 per cent had no idea who could open an Innovative Finance Isa.

Half were not aware that it is possible to transfer Cash Isas into investment Isas and vice-versa and half were not aware of the requirement to transfer between Isa providers – rather than closing and reopening a new one – in order to preserve the tax-free status of the savings with it.

Differing terminology among Isa providers could be adding to the confusion as just six in 10 people aged 50 plus know investment Isas and stock and shares Isas are different labels for the same type of account.

Almost half said they would like a single Isa account rather than having specific Isas for housing and pensions. 

Nici Audhlam-Gardiner, managing director of Saga Investment Services, is calling for a single Isa account for all ages. 

She said: “So many changes have been made to the Isa system over recent years that people are struggling to understand the rules. We are in danger of every good idea resulting in a new type of savings plan and in doing so we end up with a Heath Robinson savings model.”

Simon Webster, managing director at Facts & Figures Financial Planning, said: "It is not as much of a problem as Saga indicates as most people over 50 know that they can stick £15,000 into an Isa.

"However, complexity is never a good thing and there is a tendency among politicians to take a good idea and try make it more complicated to show the world how clever they are."