50% of people are missing out on tax-free savings

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Only 50% of savers will be putting money into a cash ISA this year and those who do will put in an average of £2,784 - just under half the yearly allowance available, according to new research from uSwitch.

Collectively, consumers will miss out on £182 billion in tax-free savings by not using up their full ISA allowance but 25% are not prepared to give up anything to meet the shortfall.

More than three quarters are not aware they can save up to £5,340 this tax year and only 25% will use up their total allowance.


Alarmingly, of those savers with an ISA nearly half are not aware of the interest rate on the account and 47% have never switched accounts to get a better deal.

But many people are trying to increase their savings and are willing to cut back on other areas of spending. For example, 16% are willing to forego a holiday, 22% are happy to cut out daily luxuries and 12% would miss out on a new car or home improvements to try to put more money into an ISA.

"With household finances being battered by the rising cost of living and frozen pay, savings are often the first casualty. But given the current level of uncertainty, having savings to fall back on is more important than ever," says Michael Ossei, personal finance expert for uSwitch.com.

"For a new generation of 'need cash now' savers, locking money away for any length of time is a big ask. However, some ISAs are instant access, meaning you can still get your hands on your cash while benefiting from tax-free savings too," he adds.

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