As ISA limits for over 50s increase – ISA inertia costs Britons over £144 million in unnecessary tax payments
· Unbiased.co.uk’s Tax Action research reveals £109 million is being paid out in unnecessary tax a result of savers not making use of their cash ISA allowance
· £35 million is being paid out in wasted tax by shareholders who do not transfer their holdings into an equity ISA
· 6.2 million adults hold a savings or deposit account – but no ISA – and nearly 75% (4.6 million) of these savers are estimated to have added to their accounts during the financial year
· 1.7 million taxpaying adults hold equities – but no ISA – and 128,000 are estimated to have increased their investment during the financial year
· Take Tax Action now by visiting Unbiased.co.uk
As those aged over 50 who save in Individual Savings Accounts (ISAs) will soon be able to enjoy Chancellor Alistair Darling’s Budget boost of increased ISA allowances, research from Unbiased.co.uk, the professional advice website, shows that Britons are currently wasting over £144 million in tax by not putting their savings and investments into a tax-efficient savings account. These figures could well be set to increase if those aged over 50 fail to take advantage of their increased ISA allowance.
Unbiased.co.uk’s research shows that £109 million is being paid out in unnecessary tax as a result of individuals not using their annual cash ISA allowance. The figures show that some 6.2 million UK adults hold a savings or deposit account, but no ISA – and nearly three quarters of savers (4.6 million) are estimated to have added to their accounts during the financial year.
In addition, £35 million is being shelled out in wasted tax by shareholders who do not transfer their holdings into an equity ISA. And out of the 1.7 million investors who hold equities but fail to have an ISA, 128,000 are estimated to have increased their investment in the previous year.
David Elms, Chief Executive of Unbiased.co.uk commented: “As savings returns continue to dwindle in this low interest environment, it is more important than ever for consumers to be astute when it comes to managing their savings – and make sure they are not paying unnecessary money to the taxman. Savers can avoid this pitfall by making sure their savings are kept in a tax efficient vehicle such as an ISA. Those aged over 50 have been given a head-start, and from 6 October 2009 will be able to take advantage of the increase in ISA limits. Consumers should make sure they are using as much of their tax efficient ISA allowance as possible, in order to avoid unnecessary tax payments and get the best return on their cash.
“You may already consult an accountant for tax advice, but to ensure you’re managing your personal finances as tax efficiently as possible, an independent financial adviser can offer invaluable help. Only an IFA can advise you on how best to manage your savings, investments and retirement funding and avoid tax wastage.”
These figures have been calculated as a result of Unbiased.co.uk’s annual TaxAction* campaign, now in its seventeenth year, which highlights the £10bn in unnecessary tax paid by UK savers this year.
* TaxAction 2009 report produced for IFA Promotion by RAKM, based on a specially commissioned analysis of Inland Revenue and a range of other official data sources.
ENDS
For further information on Unbiased.co.uk, the professional advice website pleases contact:
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David Elms |
Anna Schirmer/Jennifer Comerford/ Anna Moulds |
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Unbiased.co.uk |
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Notes to Editors
Unbiased.co.uk, the professional advice website
Unbiased.co.uk is the free and confidential UK-wide search service matching consumers with the most appropriate local professional advisers for their needs. In 2008, Unbiased.co.uk fulfilled over half a million searches for local, professional advice.
The portal currently houses three professional advice searches: ‘find an IFA’, ‘find a mortgage adviser’, and ‘find a solicitor’, and is inviting accountants to sign up for its ‘find an accountant’ service. These searches enable consumers to find relevant professional advisers by postcode, area of specialism and payment method, amongst other options.
IFA Promotion, the organisation behind Unbiased.co.uk, is now in its 20th year, and was set up to promote the benefits of independent financial advice to the consumer.
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