- UK savers could miss out on tax benefits on £4.8 billion* in savings by not moving money from taxed instant access accounts into their ISAs
- Nearly £1bn* could remain in tax-free accounts if people instead withdrew from non ISA accounts
- Ages 35-54 are the most likely to dip into their ISAs even though they have other options
LONDON, 8-3-2014 — /EuropaWire/ — UK savers are expected to miss out on tax benefits on £4.8 billion* by not ‘maxing out’ their ISAs before the end of the tax year with money available in their instant access accounts, according to new figures from the quarterly Halifax Savings Barometer. The figures show that across the UK many savers aren’t getting the best tax deal for their money, despite having the opportunity.
Richard Fearon, Head of Halifax Savings, said:
“These savers have made a great step in opening up an ISA in the first place, and they should be congratulated. But there may be a missed opportunity here if customers do not take action. With the end of the tax year looming, it’s a good time to think about which account is really the best to have your money in. Keeping it in an ISA puts you in a position to get tax benefits for years to come.”
Other figures from the barometer reveal:
- Over 6 million ISA savers have not used their full tax-free allowance in the current tax year up to January 2014.
- On average ISA savers are currently only using around £2,000 of their allowance a shortfall of close to £3,800.
In addition, so far this year ISA holders across the UK have made an estimated £1bn* worth of withdrawals that could instead have come from their instant access accounts. People aged between 35-54 are the most likely to be making withdrawals from their ISAs despite having money available in other accounts, the figures reveal.
“ISAs should be one of the first places to save each year, and definitely among the last to take money out of,” said Richard Fearon. “Withdrawing money from an ISA permanently reduces how much you can put in it that tax year, so I’d urge anyone to think twice if they have other options available. Other savings accounts simply can’t match an ISA’s ability to deliver tax-free returns for years to come.”
Data in this release is from the Halifax savings database at January 2014 based on all active (newly opened or deposited into during this tax year) ISA accounts during the current tax year. The figures in this release are averages per customer, and all market figures have been grossed up based on using CACI’s market share assessment of Halifax ISA deposits.
* Customers may already be eligible for tax benefits on some of their savings if their income falls below taxable levels.
For further information please contact:
Halifax Press Team:
Michael O’Tooe: 0207 574 8659 / 07867814168 michael.o’firstname.lastname@example.org
Shella Ali: 0207 356 2017 / 07795 611154 email@example.com
Lauren Jones: 0207 4404 579 / 07825 584900 firstname.lastname@example.org
Ben Marquand: 020 7356 1838 / 07881311199 email@example.com