Two-thirds of adults – 33 million people – have neglected to save or invest any money into tax-friendly Individual Savings Accounts.
Rules allow each person over the age of 18 to put aside up to £15,000 in a cash Isa, or a stocks and shares Isa, or a mix of the two.
In the next tax year, starting on April 6, individuals can put aside £15,240 and shelter gains from Revenue & Customs.
But research by Axa Self Investor, a stocks and shares Isa provider, reveals that fewer than a third of eligible adults have taken up the offer.
Of those, 54 per cent did not know what the Isa limit was, with savers on average leaving three-fifths of their annual allowance unused.
Anyone with plentiful savings should fill up their pots to the £15,000 limit before the end of the tax year on April 5.
Adrian Lowcock, head of investing at Axa Self Investor, says: ‘Households could be paying billions in needless tax, because they are not using their full Isa limit.’
But experts also point to valid reasons why some may have shunned Isas, including the low interest rates on offer on cash accounts.
Hannah Maundrell, editor of comparison website money.co.uk, says: ‘You can’t blame disillusioned savers for using the money to pay off expensive debts or playing the system by using high interest current accounts. But interest rates will rise.
‘Any money paid into Isas now will keep its taxfree status ongoing so it’s worth taking advantage.’
Among the top paying cash Isas, with a fixed rate for one year, is Virgin Money’s deal at 1.7 per cent for a minimum deposit of £1, available in branches, online, by phone or by post.
The Post Office also offers a branch or postal account paying 1.55 per cent for a minimum deposit of £500.
Sam: 26th Jan 2015 14:27:00
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