Brits ignore ISAs and cost themselves £170 million in tax

With the ISA deadline of 5th April just two months away, UK taxpayers are wasting £170 million by not using tax-efficient Individual Savings Accounts, says Unbiased.co.uk, the website promoting the benefits of independent financial advice.

Over 4m people hold equities, but don’t use ISAs

Over 7m people hold a savings account, but choose to use that instead of an ISA to safeguard their money from the taxman.

There are two ways in which Britons are costing themselves in tax. £86 million is being paid out as a result of savings which do not make use of ISAs, and £84 million occurred as a result of equities being held outside ISAs. April 5th 2007 is the deadline for individuals to contribute up to their annual limit (£3,000 for cash ISAs; £7,000 for maxi ISAs) towards Individual Savings Accounts for this tax year. After this date, the limits will reset and allow taxpayers to make use of the tax relief once again.

David Elms, Chief Executive of IFA Promotion commented “Whether or not to put your savings and/or other investments into an ISA is a straightforward decision. If you do not use an ISA, you will pay more tax – it really is as simple as that. We would urge consumers to always take independent financial advice before taking out any financial product, but an Individual Savings Account is an excellent place for your money.”

These figures have been calculated as a result of Unbiased.co.uk’s annual TaxAction campaign, now in its fourteenth year, which highlights the £7.6bn in unnecessary tax paid by UK savers this year.