eToro Research Reveals UK ISA Knowledge Gap

eToro has highlighted a growing UK ISA knowledge gap among savers ahead of significant changes to Individual Savings Accounts (ISAs) scheduled for April 2027. While 55% of respondents are aware that the Government plans to reform ISA rules, many still lack a clear understanding of how the changes could affect their savings and investment decisions. 

On average, savers correctly understood fewer than three of seven key changes included in the reforms. Meanwhile, only 2% demonstrated a strong understanding by correctly identifying at least six changes, while 45% understood two or fewer. Furthermore, around one-third of respondents remained unsure about each individual change, highlighting widespread uncertainty across the savings market.  Under the new rules, the annual Cash ISA allowance for people under 65 will fall from £20,000 to £12,000 from April 6, 2027.

However, the overall annual ISA allowance will remain at £20,000. People aged 65 and above will continue to receive the existing £20,000 Cash ISA allowance.  In addition, a 22% charge will apply to interest earned on cash held within non-cash ISAs, including Stocks and Shares ISAs. Only 38% of respondents understood this change. Moreover, 48% incorrectly believed that people under 65 would still be able to transfer funds from a Stocks and Shares ISA into a Cash ISA after the reforms take effect.  

eToro Research Reveals UK ISA Knowledge Gap

Consequently, uncertainty could influence how savers manage their money. About 67% believe the ISA system is becoming too complicated, while 68% describe the charge on cash held within Stocks and Shares ISAs as a penalty. Furthermore, 59% say they would prefer leaving their money untouched rather than risk making a mistake, and only 31% feel confident moving funds between cash savings and investments.  The findings also raise concerns about the Government’s objective of encouraging greater investment. 

Only 31% of savers said reducing the Cash ISA allowance would make them more likely to invest through a Stocks and Shares ISA.  Older savers appear particularly cautious. Around 75% of people aged 55 to 65 view the cash charge as a penalty, while only 19% feel confident moving money between cash and investments. By comparison, 38% of 18-to-24-year-olds express confidence in making such moves.  Dan Moczulski, UK Managing Director at eToro, said, “The whole point of this reform was to turn Britain into a nation of investors.” 

He added, “The problem isn’t simply that people haven’t heard about the changes. Many have. It’s that they don’t understand what the new rules will mean for their money.”  Under the reforms, the reduced £12,000 Cash ISA allowance will apply only to new subscriptions from April 6, 2027, meaning existing Cash ISA balances will not be reduced. In addition, transfers from Stocks and Shares ISAs into Cash ISAs will remain available for people aged 65 and over, while younger savers will no longer have that option.

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