Millions of Brits Have Never Heard of the IFISA
Millions of Brits have never heard of the Innovative Finance ISA (IFISA), three years after the tax wrapper was first released.
According to new research from property peer-to-peer lender Relendex, just eight per cent of Brits know what an IFISA is, meaning that a massive 45.9m have never heard of it.
Interestingly, five per cent of the people surveyed said that they had also heard of the Drawdown ISA, a fictitious ISA invented by Relendex for the purpose of the survey.
“If savers are to get the best returns, we need to start with financial education so that people are aware of the tax efficient investment options open to them,” said Paul Sonabend, executive director at Relendex. “This survey highlights that only a small number of people have heard of IFISAs, only slightly more than those who have heard of the non-existent Drawdown ISA.”
In the 2017/18 tax year, just 31,000 people opened an IFISA account, compared with 2.8m who opened a stocks and shares ISA, and 7.7m who added money to a cash ISA.
However, despite the popularity of these mainstream ISAs, Relendex’ research found that 24 per cent of UK adults had never heard of a cash ISA, and almost half (48 per cent) had never heard of a stocks and shares ISA.
“We know that saving even a small amount can be difficult,” said Sonabend. “For those who have managed to put away some of their hard-earned cash they want to make sure their money works for them.
“The relatively new IFISA can give significant returns. This gives those with nest eggs of even £1,000 or £3,000 the opportunity to put their savings into an area that used to be the realm of investors with large amounts to save.
“For example, in just one year, a savings pot of £3,000 would earn £150 more with an IFISA than an average cash ISA.”
Sonabend’s calculations were based on the average cash ISA return of 0.7 per cent, versus the average IFISA return of 5.75 per cent.
Relendex offers returns of up to ten per cent per annum on its self-select ISA product.
Updated: Tuesday, March 19th, 2019