Shares ISA ignorance

ReportInvestor

Times Money Editor

ISA savers miss the punchline - ignorance is widespread

40% of Equity ISA investors don't think their investments are linked to the stock market and can go down :eek:

"....Some 40 per cent of equity Isa investors do not realise that they are investing in the stock market. This is not some shonky survey of the type that floods the Times Money offices, in which extensive research from Bigbank Ltd finds that four out of five banking customers prefer to be ripped off. No, this statistic comes from the Financial Services Authority, the chief City watchdog, as part of its in-depth investigation into financial capability..."

Spread the word at work on Monday

roswell

no doubt they have been miss sold them to .........

savingforoz

I read this too, and was baffled - what on earth did they think they were investing in?!

ReportInvestor

The problem has arisen from terminology. When you have a conversation about "ISAs" people talk at cross-purposes, misunderstand and are afraid to ask. Those few who know don't want to bore the pants off everyone else by launching into a 5 minute explanation.

New Labour, especially Gordon Brown "the great meddler" had to come up with its own "new" savings / investment scheme, even though the Tories' schemes had worked well and the investing public had learned the regime.

And they had to choose a new name for the public to get their heads round.

ISAs

BUT

Maxis and Minis
Shares / Cash / Insurance (now defunct but adding to the confusion. Some people even broke the law because they didn't know to cancel DDs .)

But all called ISAs . If you have been waiting in a queue for a long time at a bank or building society try checking if the cashier knows her onions. Some haven't got a clue .

And Labour has also threatened to change the eligible amounts, then pulled back from its threat - all adding to the confusion in people's minds.

And then they had to deal with maturing Tessas, so we got Toisas as well :rolleyes: .

The Conservatives had

PEPs (shares)
TESSAs (Cash)

Simple really :rolleyes:. A child could have thought of it, but not Gordon.

It's a classic case of meddling politicians unwittingly causing unnecessary problems.

ReportInvestor

MSE could help clear up the Chancellor's mess by creating two sub-boards in the Savings section.

Cash ISAs, Toisas, Tessas
Share ISAs, PEPs

EdInvestor

What if they changed the names to

Savings ISA (mini)

and

Investment ISA ( maxi and mini)

Be nice if they put the savings ISA amount up to 4k at the same time, so the two minis were the same

Would that help, or would it just confuse matters even further?

It's pretty obvious that many people think "investment" is the same as "savings", no wonder they get into trouble.