Britons are throwing away £382 million in tax by failing to put their savings into tax free ISAs. Recent research carried out by Unbiased.co.uk, showed that the amount of money wasted through failure to save on tax has doubled over the last year.
Unbiased.co.uk found that £249 million is being paid out in unnecessary tax as a result of savings not held in ISAs
, and £133 million in tax payments occurred as a result of stocks and shares being held outside ISAs.
The deadline for ISA holders to maximise their tax free savings is April 5th 2008. The current deposit limits are £3,000 for cash ISAs and £7,000 for maxi ISAs, after the deadline the limits will reset and allow taxpayers to benefit from tax relief for another tax year.
David Elms, Chief Executive of Independent Financial Adviser 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. Once you have missed the April 5th deadline, you will lose your tax-free savings allowance for the 2007/ 2008 tax year."
One financial service provider, that has seen a rise in ISA sales since 2007, is Barclays. Barclays Stockbrokers today reported a 26 per cent rise in ISA account openings for the period 2nd January 2008 to 28th February 2008 compared with the same period in 2007.
Barclays has created a list of ten tips on investing in ISAs as a result of its increased sales. The tips include reviewing your provider and not waiting until the last minute to invest.
Amy Nauiokas, MD and Head of Barclays Stockbrokers said, "We are delighted to see investors actively taking their tax allowance in 2008 despite the recent volatility. The 26 per cent increase in new ISAs over 2007 reinforces the investor belief that investments will outperform over the medium to long term.
"Our ten top tips show that the benefits of ISA investing are clear. ISAs should be regarded as long term strategic tax planning tools which not only maximise investors’ returns but also make their lives easier through their simplicity.
"Investors don't have to pay higher rates of tax, worry about CGT or even list their ISA assets on their tax returns. As always I urge investors to be early birds – the earlier investors open their ISAs the sooner they can reap the tax benefits."
© Fair Investment Company Ltd