UK savers and investors not using tax breaks effectively, research shows

News - Savings

Written by Ray Clancy

Tuesday, 16 November 2010 11:36

People in the UK are saving for a rainy day but thousands are still handing an unnecessary gift to the tax man by not taking advantage of tax breaks by using ISAs, a new research report suggests.

Gloucester residents save the most each month with an average of £415 while in Belfast people save the least at just 334 a month and fair worst for people not saving at all at 36%, the research from Fidelity Investment Managers shows.

Wolverhampton has the highest number of people saving in the hope of retiring early, more Leeds residents are saving to provide for children/grandchildren than anywhere else in the UK and more people in Aberyswyth are saving/investing to pay off a lump sum from their mortgage.

The survey of 30 UK cities also shows that one in two people in London are putting away almost £200 per month but 44% do not have an ISA.

‘It is great news that Londoners are saving so much each month, but with rising taxes savers and investors really should make sure they put as much as they can in their ISA each year and not miss out on the tax relief that is rightfully theirs,’ said Rob Fisher, head of UK Personal Investment at Fidelity Investment Managers.

‘ISAs are a year round tax perk and a fantastic use it or lose it tax perk, no further tax to pay ever, and at the moment a generous £20,400 allowance for a couple, but no way back if you let the tax year pass without taking up your allowance,’ he added.