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Savers unaware of new £15,000 ISA limit

Egg with ISA written on it23/4/14

By Ian Barnsley

Just under a quarter of people who have ISAs are unaware they will be able to save up to £15,000 tax-free from 1 July, new research reveals.

Chancellor George Osborne announced new ISA limits in his Budget statement last month, but a Halifax poll suggests 23% of savers are unaware of the changes.

And while 32% intend to save more money because of the changes, more than half believe the amount of cash they are saving will not alter.

Some 61% of those surveyed understand the benefits of the changes including the raised limit, but 28 per cent admit they require assistance to fully understand what they mean.

Younger savers most unaware of new ISA

It seems younger savers know the least about the changes and how they will be affected.

The Halifax poll reveals 40% of ISA holders between the ages of 18 and 24 are unaware of the rule changes, along with 36% of 25 to 36-year-olds.

"The new ISA rules have the potential to transform the level of UK's savings," said Richard Fearon, head of Halifax savings.

"However, in the short term there remains confusion about how much people can save in their ISA and when.

"As a result, many savers could already be missing out on tax-free savings by being unaware that it's possible to start saving now and top up to the full limit when it becomes available in July."

£15,000 ISA limit from 1 July

Halifax is offering those who open an ISA with a fixed rate before the limit officially starts in July a tax-free account from the start of the financial year.

Savers will then be able to put in the extra when the new limit kicks in. The deal does not include stocks and shares ISA subscriptions.

The bank has a fixed-rate ISA that pays 2 per cent for 18 months, while the interest increases to 2.05 per cent and 2.25 per cent with two and three-year fixed rates respectively.

The Halifax Junior ISA, launched two years ago, currently offers a 6 per cent interest rate.

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