Savers could lose out on up to £403 million over the next tax year by not using their Isa allowances, a new report reveals.
According to unbiased.co.uk's Tax Action Report, many savers continue to ignore Isas despite low interest rates making saving in a tax-efficient way even more important.
Instead, savers are sticking with traditional accounts and investments and losing chunks of their gains to the taxman.
Making the calculation based on the number of people with savings and investments, the research suggests that savers could be losing out on £376 million of extra income by not making use of their cash Isa allowance this year.
In addition, it estimates that investors could be losing out on another £27 million by not utilising stocks and shares Isas.
'Even if you only have a little to put aside, saving a small amount regularly each month in a tax-efficient savings account can make a real difference over the long term,' says Karen Barrett, chief executive of unbiased.co.uk.
'It is important for people to ensure they are making their savings work as hard as possible. By putting some basic tax planning in place, such as investing in an Isa rather than a standard savings account, they could optimise their savings without having to do very much.'
This was written for our sister website, Moneywise