The months leading up to the new tax year are often the busiest time for ISA deals, with competitive rates and promotions on offer. But, are all investors aware of the range of ISA options available to them?
New research from UK Investment platform CMC Invest suggests that developments concerning ISAs could be passing investors by. One-third (32%) of investors surveyed said they do not have a Flexible Stocks & Shares ISA. Interestingly, once informed of the benefits, over two-thirds (67%) of those responded that they would consider opening one.
First introduced in 2016, Flexible Stocks & Shares ISAs allow investors to deposit, withdraw and redeposit money into their ISA in the same tax year without impacting their £20,000 allowance. This flexibility gives people more power to manage their investments.
From April 6th 2024, investors can open and contribute to multiple ISAs of the same type in the same tax year – except a Lifetime ISA. The annual ISA allowance is still £20,000.
The survey of 2,000 investors with £10,000+ investable assets found that over 44s are less likely to have a Flexible Stocks & Shares ISA, with only 52% of Gen X, 41% of Baby Boomers, and 55% of the Silent Generation confirming they have one open. That contrasts with 78% of Gen Z investors and 79% of Millennial investors saying they have these accounts.
Of those who had been investing for four to five years, three quarters surveyed said they do have a Flexible Stocks & Shares ISA, but of those with over 10 years of investing experience, less than half (42%) have one.
Jason Law, Investment Operations Manager and head of CMC Group’s ISA governance committee at CMC Invest, comments, “The option to take out ISAs with multiple providers opens up new opportunities for investors to take advantage of a range of benefits, and gives even more reason to be aware of all the ISA types available, to make an informed decision on what suits your needs.
Our survey data showed a number of older investors haven’t explored the benefits of a Flexible Stocks & Shares ISA. The upcoming rule changes mean these investors can, if they choose, open a Flexible ISA in addition to their existing account and contribute to both in the same tax year. This would allow them to see if a flexible account worked better for them.”
