Many savers are choosing against using their Isa allowance as they do not understand how they work, according to research.
Of 1,200 people questioned by moneysupermaket.com, 37 per cent stated that they had no intention of using an Isa this year.
Out of this number, 51 per cent stated this was because they could not afford to save, while 24 cent said that they avoided using their Isa allowance as they are uncertain about how to invest in them.
Kevin Mountford, head of banking at moneysupermarket.com, said that for UK taxpayers it makes sense to invest in an Isa, especially if your earnings fall into the higher taxation bracket.
It is currently a difficult time for savers, the price comparison site has reported, as the average rate on the top five savings accounts had fallen to 2.89 per cent at the start of this month. This falls short of the 3.63 per cent needed in order to make savings work for basic rate taxpayers.