Half of ISA investors ‘won’t use full tax free allowance’

Just seven per cent of investors have already used their full ISA allowance for 2011-12, according to figures from The Share Centre.

The retail stockbroker’s research found that nearly half of ISA investors do not plan to utilise their full quota for this tax year, with the majority citing this was due to lack of funds.

Savers who have already invested in an ISA this year have typically used a third of their ISA allowance.

Only 28 per cent of those planning to invest in an ISA before April 5 are planning to do so by investing in the stock market, with 67 per cent opting for a cash ISA, the study revealed.

Andy Parsons, head of investment research at The Share Centre, said: “The ISA allowance is very much ‘use it or lose it’ and can’t be carried over to the following year.

“As interest rates remain low and are likely to be so for the foreseeable future, its vital investors take advantage of their allowance and protect what they can from the taxman.”

The Stocks and Shares ISA limit for tax free savings and investments this year is £10,680, double that of a Cash ISA.