Despite 61% of UK adults having saved over £1,000, almost one in four are reluctant to invest their personal savings, according to new research from Oaksmore ISA, with savers opting to leave their funds in bank accounts which attract little or no interest.

The research revealed that the loss of potential interest and income appears to be caused by a lack of awareness and understanding of the options available. Although savers are permitted by HMRC to invest up to £20,000 into an ISA and benefit from tax-free returns on their savings, 16% of the survey participants were not aware of any type of ISA.

However, while 75% were aware of traditional cash ISAs, many people had no knowledge of any other types of investment product, with just 40% familiar with stocks and shares ISAs, 31% familiar with Help to Buy ISAs and under 25% acquainted with Lifetime ISAs.

Oaksmore director Reuben Skelton said: “It’s really surprising to see just how low awareness is amongst the general public about ISAs. Innovative Finance ISAs are those with which UK adults are least familiar, yet they offer some of the most innovative and rewarding ways to invest.

“Despite this, of the 38% of Britons with savings of up to £5,000, the vast majority (76%) would be willing to consider such investments when they are made aware of them. Not surprising when some IF ISAs offer returns as high as 7.5% per annum.

“Such products can also offer huge social benefits, for example helping to support growing businesses, major infrastructure projects or much-needed investment in local communities.”

The study found that just 6% of the population were aware of Innovative Finance (IF) ISAs.

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