Only a third of taxpayers made use of their ISA allowance last year, wasting more than £15billion in tax payments, according to research by Fair Investment Company.
Nick Scarrett, head of investment and pensions at the firm says only 11.3million cash ISA accounts were opened in the UK in 2008/09, and considering there is a tax paying population of 30 million in the UK, that suggests only 37 per cent of us are making use of our tax free ISA allowances.
Fair Investment Company has calculated that the unused cash ISAs mean around £15billion was 'lost' to the taxman.
"Obviously it is not realistic to assume that every tax paying adult in the UK will use their full cash ISA allowance," said Mr Scarrett, "but these figures do highlight the fact that by paying tax on the money they could have saved in an ISA, UK taxpayers have thrown away billions of pounds in tax payments."
Fair Investment Company is urging people who haven't yet used their cash ISA allowances to do so earlier rather than later because the Easter break means the last working day is actually April 1st, so many applications will have to be in by then to make the year end of April 5th.
Mr Scarrett says that those who have a cash ISA already should consider transferring their money into a better paying ISA if they are not getting a good rate, and also urges investors to consider stocks and shares ISAs for potentially higher returns.
He says that although most people who have an ISA have a cash ISA (79.6 per cent of all ISA investments were cash ISAs in 2008/09), investors shouldn’t dismiss stocks and shares ISAs.
“It is important that investors understand the risks, but stocks and shares ISAs can be a good option for many people, especially while cash ISA rates are so low," he said, adding, "there are lots of investment options within a stocks and shares ISA, including corporate bond funds, structured products and absolute return funds, which aim to provide either an income or capital growth (or a combination of the two), in good times and in bad."