The latest survey by Co-operative Financial Services has found that a startling number of over-50s in the UK are confused about their ISA allowance. They suggest that around 75% of this population do not know what tax-free ISA allowance they are entitled to. Around 32% of this age group thought that the allowance for a cash ISA was £3,600 per annum, while 22% thought the limit was £1,800 per annum.

In order to ensure that elderly savers are making the most out of their allowance, we felt we would clear the confusion up. We are happy to report that since October 2009, the government has upped the limit for over-50s to £5,100 a year, far more than most over-50s expect.

Despite the ambiguity around the limit, the Co-operative survey found that the over-50s are 18% more likely to invest in an ISA than the under-50s. In addition, they are around 60% more likely to make regular contributions into their ISA. One reason for this is that many over-50s use the interest gained from an ISA as a source of income. This makes this population particularly price sensitive, with more people willing to shift provider if they spot a better deal elsewhere.

So in today’s environment where can one get the best ISA deal? The honest answer is unfortunately that the interest one can earn from an ISA has been gradually evaporating as interest rates hit an all time low. However, there are still institutions out there who are giving customers around 3.5% on their ISA savings. A quick internet search will soon reveal the players. Happy hunting.