SKIPTON Building Society is calling on the Government to abolish tax on all savings interest in a bid to clarify the market.

The mutual said the move would help reduce confusion among thousands of savers over rules covering their investments and encourage more people to save for the long term.

The call comes following a survey of 2,000 savers by the Skipton which shows that

many are missing out through not understanding the rules and financial jargon associated with the new Personal Savings Allowance and existing savings accounts.

Nearly half (47 per cent) of respondents said they are confused by the rules associated with ISA accounts, 44 per cent said they were unaware of what the maximum amount they could put into an ISA and more than a third (36 per cent) did not know what the new Personal Savings Allowance (PSA) was.

The research revealed some regional variations in savings knowledge, with more than half (53 per cent) of people in Yorkshire unaware of ISA rules.

Skipton's findings also showed that one in five people did not save, ten per cent of this group citing a lack of understanding of the different types of savings products .

A fifth of those surveyed said they did not know how an ISA differed from standard savings accounts, while ten per cent didn’t know what the acronyms ISA or PSA stood for.

More than 80 per cent of savers aged 45 and over said they were not clear if they could invest in a multiple ISA each tax year, while 40 per cent were unaware of the maximum ISA investment limit.

Kris Brewster, Skipton Building Society head of products, said: “It is clear from our research that the nation is confused when it comes to saving. With the different types of savings accounts out there it seems that this confusion is not only preventing people from making the most of their tax free savings options, for one in ten, it’s a barrier to saving - full stop.

“And with the introduction of the new PSA and the Lifetime ISA, which the Government has introduced to encourage people to save for the future, we believe these will add only more confusion and concern for consumers. The savings landscape is becoming too complicated, especially with multiple types of ISA products.

“We’d encourage the Government to think about really helping savers by ending tax on all savings interest, and in doing so, abolishing the need for ISAs, putting an end to this confusion and creating a nation of lifetime savers.”