Millions of savers are set to waste tens of millions of pounds in unnecessary tax payments because they have not put their savings or investments in a tax efficient ISA, unbiased.co.uk has said.

With less than two weeks to go before the 2009/10 ISA deadline, around six million Brits currently have savings and investments but do not subscribe to an ISA, with the professional advice website calculating that savers are losing up to £35million in taxable earnings, which could be sheltered from the taxman if the capital was held in an ISA.

However, unbiased.co.uk has discovered that despite the impending increases to the ISA limit – enabling all eligible savers to hold up to £10,200 instead of £7,200 an ISA – only one in ten savers said the new limit would definitely encourage them to save more, with 41 per cent of Brits saying they do not think the new allowance will improve their savings habits.

Over the past year, it has been estimated by the Office for National Statistics that more than four million Brits have paid in an average of £1,800 into a non-ISA savings account. According to unbiased.co.uk, if £1,500 of this had been invested into a cash ISA paying 0.41 per cent, then the average overall tax saving would total £15million – the equivalent of £1.72 per individual.

Meanwhile, if 1.5 million equity investors transferred an average of £4,000 of their holdings into an equity ISA, the tax saving generated would total £20million or £13 per investor.

Commenting, Karen Barrett, chief executive of unbiased.co.uk, believes that with interest rates remaining potentially “very low” for the foreseeable future, it is “more crucial than ever” for people to ensure they get the most out of their savings.

“With increased ISA limits available to those aged 50 and over – soon to be available to all from 6 April – now is the time to take advantage of tax efficient saving and ensure you are not gifting unnecessary money to the taxman.

“Savers should use the time they have before the tax year end to make sure they have made the best use possible of their annual ISA allowance,” she said.

© Fair Investment Company Ltd