Make the most of ISA tax allowances, consumers urged
ISAs offer year-round tax benefits, consumers are being reminded.
Consumers are being urged to make the most of tax efficient savings all year round and not just at the end of the tax year.According to Alliance & Leicester, while consumers are wise to the different interest rates on offer from different providers, they are not giving enough thought to the issue of tax.
Research by the bank shows that while eight out of ten savers believe a good rate of interest is a key consideration when choosing savings accounts, just one in four cites not paying tax on that interest as a primary concern.
Alliance & Leicester points out that individual savings accounts ISAs allow consumers to keep money that would otherwise go to the tax man.
Individuals are allowed to invest up to £3,600 in a cash ISA each year, but many wait until the end of the tax year to transfer a lump sum instead of making regular contributions.
According to Alliance & Leicester, they could be missing out on valuable tax-free interest payments as a result.
Hetal Parmar, managing for savings at the bank, said: "In the current climate every penny counts when it comes to savings so making your money work hard for you is crucial."
Halifax Bank of Scotland found recently that 35 per cent of UK households have an ISA.
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