Lloyds TSB Savings: Brits lose out on tax-free interest

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Lloyds TSB Savings: Brits lose out on tax-free interest

Mon 25th Feb 2008

According to new research from Lloyds TSB Savings just eight per cent of UK adults are using their full annual tax-free savings allowance by taking advantage of both cash and stocks and shares individual savings account (Isa) options.

In addition to that, 46 per cent of people admitted to not having any type of Isa product.

Although a quarter of customers believe that they could get a better rate elsewhere, two-thirds of those surveyed said they did not shop around for deals.

Part of the problems appears to be that consumers are not aware of their options; 27 per cent of savers did not realise it was possible to switch Isa providers and one in six thought it was only an option at the end of the tax year.

One thing the study made clear was that it is not a lack of funds that is preventing people from using their tax-free savings allowance, with one in three non-Isa holders revealing that they have at least £1,000 worth of funds available to them.

Liz Hogbin, savings and investments director at Lloyds TSB, said: "Sometimes shopping around can really be worthwhile and by resting on their laurels many Isa savers are actually losing out on easy money."

Earlier today Abbey launched a new Super Isa with a tax-free rate of ten per cent AER.

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