Savers to lose out on £230m
UK savers could be wasting more than £230m by failing to take advantage of their yearly Individual Savings Account (ISA) allowance, according to Nationwide Building Society.
Despite the fact that a third of UK adults currently hold an ISA, by not investing up the full amount permitted by the Government, many are missing out on tax-efficient returns on their savings, Nationwide has found. Many even fail to top up their account on a yearly basis.
Nationwide estimates that for the tax year 2007/08, mini-cash ISA holders will fail to top up their accounts by approximately £9bn, mini stocks and shares will see a possible shortfall of £5.5bn and maxi ISA holders will fail to top up by around £6bn. If this underfunding of £20.5bn was invested in a non-ISA savings product with a gross rate of 5.5%, approximately £230m would be paid to the taxman this year, according to Nationwide.
Matthew Carter, Nationwide’s savings director, said: “With the ISA season soon to be drawing to a close, people should make sure they are taking advantage of the tax-efficient savings on offer by using all of this year’s ISA allowance. Any part of their allowance remaining unused by 5 April will be lost forever. Millions of people fail to do this each year and are simply allowing their hard-earned money to line the Chancellor’s coffers.
For more information on how to make the most of your ISA allowance before 5 April, see the March/April 2008 issue of Your Money, on sale 20 February 2008.