You are here: Home - Saving & Banking - News -

Tax On Savings

0
Written by:
03/03/2006

Savers are missing out on over £360m of tax benefits by failing to take out ISAs. Christina Jordan reports

Over 9 million adult savers are unnecessarily paying tax on their savings, costing them over £360 million a year, according to Intelligent Finance.

Over half of savers – 54% – equivalent to almost 9.25 million adults – have not taken out an ISA and are therefore missing out on the tax benefits they bring.

Plus 49% of people with over £2,000 in a savings account – over 4.4 million adults – admit that they have no plans to use their ISA allowance this year. The average amount respondents have saved is £4,327.70, which is below the 2005 average of £5,937, and the 2004 average of £5,180.

Nick Robinson, managing director, Intelligent Finance, said: “A significant number of savers are still losing out when it comes to making the most of their cash. At a time when average savings appear to have fallen, tax-free saving is now more important than ever before.  People should seize the opportunity to make their savings work harder for them.

“ISAs are a great way to save, you don’t get taxed on your savings interest, they pay very competitive rates and many allow instant access to cash – they should be every savers first port of call.”

Men on top

Men are more likely to have a savings account than women (42% vs 36%) and average female savings are much lower than average male savings (£2,830.60 compared to £5,715.60). The discrepancy between the two sexes is far more pronounced than in 2005, when average male savings were £6,682 compared to average female savings of £5,112.

Additionally, women are increasingly likely not to have used their ISA allowance. The research shows that 59% of women (up from 49% in 2005), compared to 50% of men, say they have no plans to use their ISA allowance this year or have never taken one out.

Christine Jones, a nursery nurse in Manchester, agrees that women are less likely to save. “Most of the girls I know don’t have the money to save,” she said. “We get paid less for a start. I think that saving is also an age thing as well as a gender issue. I’m in my twenties so it doesn’t feel like a priority, but I’m sure in the next few years I’ll have to think about starting to save.”

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Ditch your debt

The Government is set to reveal plans to make it easier for people to take out Individual Voluntary Arrangements (IVAs),...

Close