Over three quarters (78%) of UK adults are unaware of a shake-up of the ISA rules that are set to come in next month, Wesleyan Assurance Society has found.

The changes in the ISA rules, which includes allowing investors to open multiple ISAs of the same type every year, were announced by the Chancellor in the Autumn Statement in November.

The reforms are designed to incentivise ISA use by giving savers more flexibility with their money, enabling them to create ISA portfolios better suited to their needs, and making better returns easier.

However, in a survey of 2,000 UK adults, 78% said they don’t know about the rule changes.

Although, when informed about the shake-up, almost a third (31%) said the changes would make them want to invest more money into ISAs.

The survey also uncovered misconceptions around ISAs that could mean savers are missing out on the potential benefits, with seven in 10 (70%) UK adults not knowing how the different types of ISAs available work.

Furthermore, of those who don’t hold ISAs, close to half (45%) believe large sums of money are needed to open and ISA and almost a quarter (22%) said they don’t want to lock their money away where they can’t access it.

Deputy chief product officer at Wesleyan, Toby Hester, said: "The changes to ISA rules announced in the Autumn Statement are a welcome step towards providing more flexibility for investors but could have gone further.

"Being able to open more than one ISA of the same type and switch between providers will give people the freedom to shop around for better deals and achieve better returns on their investment.

"And it means they can create a portfolio of ISA investments that’s more varied and balanced to their needs, which can provide more security and peace of mind during times of market volatility."

The research also revealed that more than two fifths (42%) of UK adults have invested in ISAs, with 76% of them opting for cash ISAs, and 29% choosing to invest in stocks and shares ISAs.

Reasons for investing in ISAs include benefiting from the tax advantages (51%), to grow their money (33%), and investing for their retirement (25%).

Hester added: "ISAs are an extremely powerful savings and investment tool, so it’s concerning that that there are still so many misconceptions around ISAs, which means many are missing out.

"I’d urge savers to take a good look at how they can make the most of the new flexibilities as soon as possible to maximise the time they have to benefit."

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