Over 40% of investors not using their tax-free Isa allowanceStock market investors failing to manage Isas
12 April 2013
According to new research by First Direct, some 25% of UK adults own stocks and shares, but only 14% have used their tax free stocks and shares Isa allowance.
Isa allowance increases to £11,520
The stocks and shares Isa allowance increased to £11,520 from £11,280 at the start of the new tax year on 6 April.
All money invested in stocks and shares Isas is protected from income and capital gains tax – and there’s no further tax to pay on company dividends.
Of those investors who did not use their stocks and shares Isa allowance, almost 14% said it was because they did not know how they work.
Another 6% said they found the application process too complicated while 6% said they did not know that they existed.
South-west investors have the lowest Isa balances
First Direct also investigated differences in Isa savings around the country, revealing that investors in the South West have the lowest average Isa balance in the UK, at just £9,120.
Unsurprisingly, savers and investors in London had the highest average Isa balances – at £11,540.
Andy Forbes, head of product at First Direct, said: ‘I would urge all those, especially high-rate tax payers, who would like to invest in stocks and shares to ensure they take advantage of their ISA allowance to avoid missing out on potential tax savings.’
For those who prefer to stay with the safety of cash, rather than risking their money on the stock market, the cash Isa allowance also increased on 6 April, to £5,760.
To find the best cash Isa rates, visit our tables at www.which.co.uk/cashisas.