Speaking on the latest episode of BBC Morning Live, Laura Pomfret explained the importance of owning an Individual Savings Account . Roughly 78 per cent of adults in the UK don't have an ISA, which means around 40 million people could be missing out on tax-free savings worth up to £20,000 a year.
She added: "There are four different types of ISA. We have the cash ISA, which is kind of much like your standard savings account that we all know and love. A stocks and shares ISA, which means you actually invest in the stock market but still in this account. Innovative Finance ISA is a little niche, but these are like peer-to-peer lending platforms, crowd funding platforms, but you can do it within an ISA.
"You could open one for a child., actually, a junior ISA parent or guardian can open them. And today we're gonna be talking about the cash ISA." She further explained that having it in a normal savings account would still grow the money, but it would need to be taxed once it reaches past that threshold. She also warned: "People are missing out...there are 40 million individuals in the UK that don't have an ISA. There's probably a lot of different reasons for that, people might think they've not got enough money to put into one for example.