Less than two in 10 Brits are taking full advantage of their annual ISA allowance as the end of the current tax year approaches, Nationwide has claimed.

With the ISA deadline fast approaching on April 5th, the building society has revealed that the majority of Brits are failing to make use of their tax free savings allowance, with 56 per cent only using their cash ISA allowance to save.

In addition, despite being able to save up to £7,200 tax efficiently in an ISA, more than a quarter of Brits are wasting their full ISA allowance by saving nothing at all.

Meanwhile, although the current tax year is set to become the best performing year for stocks and shares ISAs since 1999, Nationwide’s research has discovered that there is an air of confusion surrounding this type of ISA with 30 per cent of consumers admitting to either not knowing what they are or how to invest in them.

The confusion is not limited to stocks and shares as many Brits do not know how much they can save in a cash ISA, with only 17 per cent of over 50s correctly stating that their current allowance is £10,200, while just 15 per cent of under 50s knew that their full allowance was £7,200.

As the ISA allowance is set to be increased to £10,200 for all eligible savers from the start of the 2010/11 tax year, Nationwide is calling for a better understanding of ISAs to help consumers make more of their annual allowance.

Commenting, Andy Hutchinson, head of savings at Nationwide said: “There are very few opportunities in life to ‘beat the tax system’ but saving or investing in an ISA allows you to do just that, which is why I believe every adult in the UK should consider having one. Unfortunately, our research shows that many consumers are not using an ISA of any kind and therefore losing out on the tax-efficient benefits ISAs offer.”

“If you are interested in taking advantage of this year’s ISA allowance, I encourage you to do so as soon as possible to avoid disappointment.”

© Fair Investment Company Ltd