ISA inertia costs Britons over £382 million

With less than two months left to make full use of this year’s ISA allowance, research by Unbiased.co.uk shows that Britons are wasting over £382 million in tax by not putting their savings and investments into a tax-efficient savings account. This figure more than doubled over the last year.

Unbiased.co.uk, the website promoting the benefits of independent financial advice, shows that £249 million is being paid out in unnecessary tax a result of savings which do not make use of ISAs, and £133 million in tax payments occurred as a result of equities being held outside ISAs. April 5th 2008 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: “Savers should use the next weeks to make sure they have made full use of their ISA allowance – if you decide not to save into an ISA, you will end up paying more tax. And once you have missed the April 5th deadline, you will lose you tax-free savings allowance for the 2007/ 2008 tax year.”

These figures have been calculated as a result of Unbiased.co.uk’s annual TaxAction campaign, now in its fifteenth year, which highlights the £7.9bn in unnecessary tax paid by UK savers this year.

To find a local IFA in your area who can advise you on ISAs or other tax-efficient methods of saving, go to unbiased.co.uk. You can also access simple tips on how to be more tax-savvy, find an online tax wastage calculator, and a comprehensive guide to saving tax through our dedicated website at unbiased.co.uk/taketaxaction.