Nervous savers 'should look at cash Isas'

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Consumers who are nervous about investing savings on the stock market should at least make use of their cash Isa allowance, according to one expert.

Senior analyst at investment broker Hargreaves Lansdown Meera Patel said that many consumers were confused by Isa products.

Her comments came as Isa activity begins to peak as consumers hurry to use up their tax-free savings allowance before the end of the tax year.

Yet despite sales of Isas being high, they are nothing like as high as they would be if the rest of the population understood the savings accounts, Ms Patel commented.

She said: "I think the main problem is the fact that PEPs and Isas aren't necessarily friendly products. I think there is a lack of understanding from consumers as to how they work."

Consumers don't like complication and wanted a savings account "that is easy to understand", she added.

She also pointed out that the government had announced plans to simplify Isas and that those who invest in cash Isas would have the option to invest cash into the stock market as well in future.

A report from Friends Provident also released this week revealed that 42 per cent of consumers did not know what the abbreviation Isa stood for and 17 per cent did not know why it was worth investing in one.

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