Outdated ISA rules are said to be putting the younger generation off saving.
This is mainly down to restrictive stocks and shares but another reason behind the discouragement is that young people who wish to save are now being refused a tax-efficient investment scheme.
Many are being put off quite simply because they have a fear of underlying charges and also because they’re a little confused to as how such investments work.
Today, it appears that there is an array of restrictions in place, many of which are preventing people from saving or generating any profits from their savings.
A recent survey suggested that “nearly a third of adults aged between the ages of 18 and 34 did not understand what stocks and shares ISAs were or how they worked – and as such, avoid using them.”
More information needed
There is a light at the end of the tunnel though as these particular findings have exposed a hidden hunger amongst young people who wish to learn more about the art of investment.
In fact, nearly 40% of the 2,000 respondents revealed they would contemplate taking out a stocks and shares ISA but only if the product was explained to them in better detail.
Risk of fines
Another reason many avoid saving is because various banks will fine those who choose to leave their agreement early. With the current climate, it’s hard for people, and especially young people, to know when they are next going to need a certain sum of money.
Many in this day and age in fact prefer to keep their hard earned savings in cash rather than taking the risk of investment.
Mike Kellard, chief executive of Axa Wealth, said:
“With the UK’s ageing population and dwindling pension pots, it is vitally important that young people are made aware of the value of investing and that stocks and shares ISAs are one tax-efficient way of doing it.”
It’s important to have some savings set aside and the sooner you start putting money aside, the more you will achieve over the years. Whether you wish to save for a new car, a wedding or a house deposit, a savings account that is interest-free is an asset to anyone – regardless of age.
You can also prevent unnecessary dips into these savings pots by seeking financial aid when needed.