Savings on rise but half of adult savers squander tax benefits

29.06.2005 Nearly 15 million adults who have money sitting in savings accounts admit they have no plans to use their ISA Nallowance this year, despite the tax breaks ISAs offer according to new ICM research1 commissioned by Intelligent Finance.
Savings balances have risen over the last year with the average amount held in savings accounts increasing from £5180 to £5937, a rise of 15%. Despite this, millions of people, many with substantial amounts of savings sitting in accounts, fail to take advantage of the tax-free savings vehicles which over time have the potential to make a significant difference to the size of their savings pots.

£74 million lost in tax benefits this year alone
47% of people - some 3.7 million adults - with over £2,000 in a savings account admit that they have no plans to use their ISA allowance this year. By failing to do so, these people could be missing out on £74 million in tax benefits this year alone². More tellingly, 36% of this group - just over 3 million people - said that they had not used their ISA allowances over the last few years.
Commenting, Nick Robinson, Managing Director, Intelligent Finance, said: "ISAs are a great way to save, you don't get taxed on your savings interest, they pay very competitive rates and many allow instant access to cash. People work hard for their money so they should see the benefit of their savings, not the taxman."
Anyone for tax breaks?
The benefits of using ISAs to save are significant. Intelligent Finance estimates that a lower rate taxpayer investing £3,000 in a mini-cash ISA every year could enjoy tax breaks to the tune of £1,924.07 over 10 years, £8,831.55 over 20 years and £23,856 over 30 years.
A higher rate taxpayer could save £3,848.14 over 10 years, £17,663.10 over 20 years and £47,712.95 over 30 years.
IF ISA
Intelligent Finance has already announced that its deadline for mini-cash ISA applications for the financial year ending 5 April 2005, will be 21 March with all paperwork being returned by 31 March 2005.
3rd March 2005