Britons are missing out on potentially thousands of pounds by leaving it until the last minute to use their ISA allowance.
ISA holders deposited millions of pounds into their accounts right before the end of the tax year – making up 13 per cent of the total value of all top-ups in the year, analysis by the investment platform InvestEngine shows
The average amount deposited by customers on the last day of the tax year alone was £3,591.
However, according to the company, those ISA investors who, since 1999, have been putting in their full allowance on the first day of the tax year, will be more than £30,000 better off than someone who left it until the last minute.
Even an Isa holder investing £1,000 a year since 1999 would be almost £5,000 better off simply by depositing at the start of the tax year.
Andrew Prosser, head of investments at InvestEngine said: “Our data shows that people are leaving it until the last few weeks – and in many cases, the last day – of the year to use their Isa allowance.
“And while this does ensure they are taking advantage of the tax wrapper given the Isa allowance does not roll over into the new tax year – by leaving it until the last minute they could be missing out on a significant amount of growth.”
Analysis of the firm’s 25,000 customers shows a frenzy of activity in the last week before the Isa deadline, with twice the number of deposits being made each day compared with the daily average for the first three months of 2023.
Separately, research by savings provider Shawbrook also show that millions of savers could be missing out on hundreds of pounds worth of interest, with more than half failing to shop around for better deals in the past 12 months.
A survey commissioned by Shawbrook found that 15 per cent of savers still held accounts opened in 2017 or earlier, when rates were at or near their lowest.
Adam Thrower, head of savings atthe company, said: “Savings rates don’t automatically change in response to Bank of England fluctuations.
“So, if you haven’t moved your money since interest rates began to climb, you could be literally throwing money away. Ignoring your rate means you’re neglecting a really easy way to reduce the impact of inflation eroding the value of your savings, and potentially growing your pot.”
The Bank of England raised interest rates 12 times in a row to a near 15-year high earlier this month, with the current rate now standing at 4.5 per cent. The central bank’s all-important base rate is now at its highest level since 2008, when the global economy was in the throes of the financial crisis.
