Nearly a third of people aged 16-24 don’t know what an ISA is, new research reveals.

Survey data supplied by investment platform Saxo found that 31 percent of young people don’t know what an ISA is, with a further 16 percent saying they also aren’t sure.

The survey also found that 33 percent of respondents had no idea how to open an ISA, 17 percent were not sure how to open one and a further 36 percent wouldn’t feel confident opening one.

ISAs are individual savings accounts which allow investors to reap tax-free benefits from saving and investing up to £20,000.

In Jeremy Hunt’s Budget last week he announced a brand-new British ISA, in a bid to encourage more Brits to invest in UK assets, which allows investors to put an extra £5,000 into UK equities tax-free.

Anaam Raza, of Saxo, said: “Every year, the UK Government gives every adult a tax-free allowance of £20,000, which is reset at the beginning of each financial year, typically during the first week of April. Any gains accumulated on an ISA are tax-exempt, making ISAs an attractive asset to investors.

“Younger demographics can reap the benefits of investing in their futures by building knowledge around the topic and how to make their money work best for them, as ISAs can be utilised for a variety of means, from buying a first home to building a pension.

“There are different types of ISAs, and research can be done to ensure you’re putting the money into the one that’s right for you.”

The survey, conducted by Censuswide, polled 2,000 UK residents and found that only 16 percent of people ages 16-24 felt confident opening an ISA, compared to 43 percent of those aged over 55.

The survey also found that an overwhelming 82 percent of people aged 55+ knew what an ISA was and 77 percent knew how to open one.

There are a range of ISAs varying wildly in terms of risk, ranging from the lowest risk cash ISAs to the riskiest including Lifetime and Innovative Finance ISAs.