To understand how consumers think and act about ISAs, we commissioned independent research with a nationally representative sample of 4,000 UK adults.
Royal London is the UK's largest mutual life, pensions and investment provider and we recently launched a Stocks and Shares ISA.
Our research reveals:
- who is investing in Stocks and Shares ISAs
- why they have ISAs
- the role of financial advisers in their decision making.
It also identifies some of the barriers to investing and how we can equip consumers to understand the options.
Key findings
ISA investment
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Stocks and Shares ISAs make up the biggest market share
But most new contributions go into Cash ISAs.
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More men than women have Stocks and Shares ISAs
There is little gender difference in Cash ISA ownership.
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Tax-free returns are the most attractive feature
Potential for higher returns and the £20,000 allowance are also key attractions.
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Few ISA holders invest up to the limit
Only 16% of ISA holders in our sample save or invest up to the £20,000 allowance limit.
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Retirement is a key ISA goal
Nearly half of all Stocks and Shares ISA holders use it to save for their retirement.
Understanding ISAs
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Cash ISAs are better understood
More people understand the tax treatment of Cash ISAs than Stocks and Shares ISAs.
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Most Stocks and Shares ISA investors know how they work
90% of users claim some knowledge, 32% a lot of knowledge and 7% none.
Barriers to investing
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Over half the sample had no investments
Not having enough money and fear of losing money are the most commonly cited reasons.
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Better returns are persuasive
39% said a potential better return could persuade them to move cash into a Stocks and Shares ISA.
Role of advisers
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Advisers are the most popular source of support
30% of Stocks and Shares ISA holders used a financial adviser for advice.
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Advisers’ knowledge is highly valued
Over half of those who used an adviser valued their knowledge most.