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ISA ignorance to cost savers £35m in tax

ISA ignorance to cost savers £35m in tax

Category: Savings

Updated: 24/03/2010
First Published: 24/03/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
As the 5 April deadline to make full use of this year's ISA allowance comes into view, it has been revealed savers will squander a massive £35 million in tax this year by not putting their savings and investments in a tax efficient savings account .

Despite the ISA limits increasing for everyone in the new tax year from £7,200 to £10,200, just one in ten (10%) people told unbiased.co.uk that the rise would definitely make them save more.

A further one in three (32%) said the new limits could possibly make them put more money away.

However, two in five (41%) of those surveyed said the higher limits would not lead them to improve their savings habits.

The research also revealed that 5.9 million adults had a savings or deposit account, yet no ISA.

By not taking advantage of the tax breaks available through both cash and equity ISAs, the website said the overall cost to Britons in unnecessary tax payments would be £35 million.

"With experts reporting that interest rates could remain very low for the foreseeable future, it is more crucial than ever for consumers to make sure their savings are working hard for them," said Karen Barrett, the website's chief executive.

"With increased ISA limits available to those aged 50 and over - soon to be available to all from 6 April - now is the time to take advantage of tax efficient saving and ensure you are not gifting unnecessary money to the taxman.

"Savers should use the time they have before the tax year end to make sure they have made the best use possible of their annual ISA allowance."

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