Research by Alliance & Leicester has revealed that an alarming number of young people have a big knowledge gap when it comes to savings, with a staggering two thirds of working 16 to 21 year olds admitting they don't know what ISA stands for, with a further 10% saying they have never even heard of an ISA.
Despite the government’s attempts to help young people start saving from an early age, 15% of 16-21 year olds say they still don’t understand the new rules and regulations for individual savings account (ISA) products. Worryingly, 16% of this age group admits they save no money at all and nearly one in 10 say they would rather spend money than put it away for a rainy day.
Having transparent, easy to understand products seems to be one of the most important issues that needs to be addressed, as nearly a fifth of working 16-21 year olds say they think the concept of an ISA is very confusing, a further one in ten think they are too complicated to understand and 8% think they are too complex to actually set up.
Emma Walkley, product manager at Alliance & Leicester, said: Young people should be encouraged to start saving early to ensure their financial future is safe. ISAs are often the first step into the world of regular saving, with customers able to make use of tax free advantages without risk on any amount from GBP1.