ISAs are 'underfunded'

Too few people are taking advantage of the savings opportunities afforded by ISAs, it has been claimed.

According to the Nationwide Building Society, ISAs are currently underfunded to the tune of £12 billion.

It is estimated that only a third of adults in the UK have cash ISAs and that many of those who do hold an ISA fail to top up their tax-free yearly allowance.

As a result, somewhere in the region of a £100 million in avoidable taxes are being paid.

Andy McQueen, Nationwide savings and mortgages director, said: “If appropriate, one way consumers can make good use of the ISA allowance is to take advantage of the fixed rate ISA products available.

“We understand that, as household finances are stretched, saving can be a challenge but it’s never been more important to build up savings to act as a buffer in uncertain times.”

There is less than a month left until 5 April when savers need to add their yearly ISA allowances.