Two-thirds unaware of upcoming savings changes

The research from Aldermore revealed that seven out of ten (70%) are not aware that the Government is introducing a Personal Savings Allowance. From April 2016 basic-rate tax payers will not have to pay tax on the first £1,000 of interest they earn on their savings in a financial year (£500 for higher rate tax payers).

Two-thirds (67%) do not know the Government will introducing the Help to Buy ISA from December, and a similar amount (66%) are unaware of the new rules from April 2016 allowing savers to top up their ISAs during the tax year if they have previously withdrawn cash.

More than six in ten (63%) aren’t aware the Financial Services Compensation Scheme deposit protection limit is being reduced from £85,000 to £75,000 from 1 January 2016;

After the forthcoming changes were highlighted, more than one-third (36%) of respondents said that they believe the introduction of the PSA will benefit them most. A further 16% said changes to the ISA flexibility would help them more. However almost three in ten (30%) said none of the changes are likely to benefit them.

Simon Healy, Managing Director for Savings at Aldermore, said:

“The savings landscape has changed significantly in recent years, allowing savers to put away more money in their ISAs, greater flexibility in how they save as well as the types of investments they can place their money in to save in a tax efficient way.

“Our research shows that a worrying majority are not aware of the forthcoming changes that could impact their savings habits. With the introduction of the Personal Savings Allowance, for example, many savers could be better off looking at traditional savings accounts rather than an ISA. Choosing a competitive rate is important, but it is important savers have an understanding of the new types of products as well as changes to the tax system or deposit protection scheme."