A large proportion of consumers are ready to take advantage of the Isa reforms which come into effect today, according to Which? research.
Our survey of 2,036 UK adults suggests that the majority of savers are supportive of the new rules, which allow them to store up to £15,000 tax free in a New Isa (NISA).
More than half (54%) of those who knew all about the new rules said that the changes would encourage them to shop around for the best Isa deals, whilst 40% claimed the changes would encourage them to save more money.
Go further: New Isa rules – find out more about how New Isas work
Consumers reluctant to switch Isas
The survey’s results indicate that Isa switching rates may increase in the coming months.
Previous Which? research suggests that more than half (55%) of those with an instant-access cash Isa and four in ten (42%) of those with a notice cash Isa have never switched.
Meanwhile, in April 2014, we discovered that just 72% of instant-access cash Isas allowed transfers in, down from 88% in 2012.
In response to our findings, Chancellor of the Exchequer George Osborne said: “We want to support savers at all stages of their life and make sure they have greater flexibility and choice over how they access their savings.
“Today’s introduction of the new Isas is a big boost for millions of people, giving them greater economic security by putting aside money in savings.”
Go further: Looking to switch Isa? – See our best rate Isa tables
Which? calls for support from Isa providers
Which? is calling on providers to ‘Scrap the Savings Trap’ and stop limiting transfers into their new Isas.
If providers do not allow transfers in, there is a risk that people won’t be able to get the best deal and their savings will be stuck in accounts paying poor rates of interest.
We also want all providers to be required to take part in the automated ISA switching service. This will make it quicker and easier for people to move their money to a better deal. Currently, it’s only used in around six in ten transfers.
Which? executive director, Richard Lloyd, said: “The Government’s reforms are good news for existing savers and they will also encourage more people to save, but the benefits will be undermined if providers don’t help savers get the best rates.
“It’s now over to the banks to help their customers make the most of their money. Providers should clearly notify their customers of their interest rates and the changes, make switching easier, and stop limiting transfers in.”
Go further: Scrap the Savings Trap – sign our petition to help savers get a fairer deal