ONLY eight per cent of UK adults have heard of the Innovative Finance ISA (IFISA), according to research from peer-to-peer property lender Relendex.
This leaves 45.9 million people unaware of the tax wrapper around debt-based securities including P2P loans, which was added to the ISA stable in 2016.
Men were more likely to have heard of the IFISA than women, at 10 per cent versus six per cent, the survey of 2,000 adults revealed.
It also found that 5 per cent of UK adults thought they had heard of a non-existent ‘Drawdown Options ISA’.
Read more: The ultimate IFISA guide
“If savers are to get the best returns, we need to start with financial education so that people are aware of the tax-efficient investment options open to them,” said Paul Sonabend (pictured), executive director at Relendex.
“This survey highlights that only a small number of people have heard of IFISAs, only slightly more than those who have heard of the non-existent ‘Drawdown ISA’.”
He noted that, in the financial year 2017-18, only 31,000 savers opened an IFISA compared to the 2.8 million individuals who opened a stocks and shares ISA and the 7.7 million savers that put money into a new cash ISA. But, even with the mass popularity of cash ISAs, Relendex’s research showed that a quarter of UK adults have never heard of them and nearly half were unaware of stocks and shares ISAs.
“We know that saving even a small amount can be difficult,” Sonabend added.
“For those who have managed to put away some of their hard-earned cash they want to make sure their money works for them. The relatively new IFISA can give significant returns.
“This gives those with nest eggs of even £1,000 or £3,000 the opportunity to put their savings into an area that used to be the realm of investors with large amounts to save. For example, in just one year, a savings pot of £3,000 would earn £150 more with an IFISA than an average cash ISA.”
Read more: The IFISAs you can open for £100 or less