- Over half (56%) of Brits don’t have a Stocks & Shares ISA, with 21% saying it’s because they found it confusing and complicated to set up
- Stocks & Shares ISA understanding increases with earnings level – over half (54%) of high earners (£100k or more) understand and use their full ISA allowance, compared with just 9% of those earning £55k or less
- Research shows a gender gap in Stocks & Shares ISA holders with only 34% of women holding accounts compared to 54% of men
- Sean Rabbitt, Wealth Director at NatWest Premier shares guidance to help with understanding ISAs.
Over half of Brits (56%) don’t have a Stocks & Shares ISA and, for those that do, only 19% found it easy to set up, according to new findings from NatWest Premier.
A Stocks and Shares ISA is a tax-efficient way to invest in shares, bonds, and funds, with no need to pay income or capital gains tax on investments. The deadline to use the 2024/2025 Stocks and Shares ISA allowance – which is £20,000 – is midnight on Saturday, April 5, 2025.
Yet, many Brits don’t understand Stocks & Shares ISAs. A quarter (25%) don’t know, or don’t use, their full Stocks & Shares ISA allowance, with 21% saying it’s too complicated and 10% admitting they needed someone else to help them set up an ISA. However, this understanding rises with earnings. Over half (54%) of high earners (annual salary of £100,000 or more) understand and use their full ISA allowance, compared to just 9% of those earning £55,000 or less.
The Stocks & Shares ISA knowledge gap is evident too when looking at men versus women. A fifth of men (18%) stated they understand and use their full Stocks & Shares ISA allowance, compared to just 7% of women. Women in general were less likely to have a Stocks & Shares ISA at all, with only 34% of women holding accounts compared to 54% of men.
The data also reveals an interesting generational trend. Younger generations understand Stocks & Shares ISAs better than older generations. Only 28% of 18–24-year-olds don’t know what a Stocks & Shares ISA is compared to 45% of 55+ year olds.
Sean Rabbitt, Wealth Director at NatWest Premier, highlighted the importance of expanding your knowledge and experience in investing this ISA season:
“There’s a famous Einstein quote that says, ‘compound interest is the eighth wonder of the world. He who understands it, earns it, he who doesn’t, pays it’
“If you don’t have a strong understanding of what investing means, it can be overwhelming, but you are not alone, and there are a range of simple, easy-to-use guides and services out there can help you get to grips with things.
“The best place to start is to understand that investing is not a one-size-fits-all and is based on your personal circumstances.
“Towards tax year end we tend to see an influx in clients that want to maximise tax efficient savings – maybe they’re hoping to save for big milestone events like a house or a wedding. Stocks and Shares ISAs can be a fantastic tool for helping you reach those long-term financial goals if you have a longer timescale to save towards. However, people can worry about the ups and downs of investing, and about not having access to those savings quickly, which can stop them benefiting from the growth available from investing.
“Investing in a Stocks & Shares ISAs will generally provide greater growth for you over the longer term with better returns as you will generally be rewarded for the greater risk you are taking, but you will have to accept that values will fluctuate to achieve those potential higher returns.
“The most important thing any saver should consider is that they should be investing money they don’t need right now. There’s a whole area on our website dedicated to investments, including an easy-to-use Stocks and Shares calculator that shows how much your money could grow based on your personal profile, along with a range of advice on how to optimise your investment knowledge, allowing you to understand your attitude to risk, and enable you to make the best-informed decision for your circumstances.”
