Individual Savings Account

A recent survey conducted by MORI Financial Services showed that just under half (47%) of adults are aware that ISAs will replace TESSAs and PEPs in April 1999. However, slightly more adults (53%) are unaware.

Men have a slightly higher awareness (54%) than women (41%) and awareness also increases by age group, 22% for 16-24 year olds rising to 62% for 55-64 year olds. Awareness according to income varies between 34% for those earning under 16311,500 pa to 71% for those earning 16340,000+.

Among those that had heard, sixty seven per cent say that they think a government ranking system on charges, availability and restrictions would be useful.

Just over half (51%) say they are unlikely to invest in an ISA compared to just over a third (34%) who say they are likely to invest. Again, likelihood to invest varies widely according to income (see chart 2).

The preferred saving method for those that are likely to invest in an ISA is monthly savings (38%), followed by single lump sum (21%), combination of lump sum/monthly saving (20%) and annual lump sum (16%). Two thirds of potential investors (67%) are more attracted by longer term savings (5 years or more), than short term, and growth combined with capital protection is more popular than purely high growth or high income for example (32% compared to 27% and 13% respectively). The most important aspects of an ISA investment are considered to be performance (33%) and the opportunity of tax-free returns (33%). A wide choice of investment on the other hand is not considered to be crucial (5%).

Twenty-seven per cent say that cash is an attractive element of an ISA followed by unit/investment trust (24%), shares (21%) and fixed interest bonds (11%).

Finally, thirty five per cent of people say that if they wanted more information about ISAs, their main source would be banks and building societies. However, adults with substantial savings (10k plus) are more likely than others to consult an independent financial advisor (29%) or a newspaper (22%).

Technical details

MORI Financial Services interviewed a representative sample of 1990 adults aged 16+, throughout Great Britain between 28-31 May 1998. Data were weighted to known population profile.