Less than half of UK adults make full use of the annual tax-free ISA allowance, a survey from Sanlam has revealed.

Forty-eight per cent of respondents to Sanlam’s survey, all of which had at least £50,000 of investable assets, had maximised their annual ISA contribution – with more than half not taking full advantage of the £20,000 tax-free allowance.  

An even smaller proportion maximised their pension contributions, with only 20% of respondents making full use of their annual £40,000 tax-free pension allowance.

Sanlam suggested there was a clear correlation between the value of assets and the ability to make full use of saving allowances. Only 33% of respondents with investable assets of between £50,000 and £100,000 maximised their ISA contributions, with this figure rising to 71% among those with more than £1m.  

Respondents who did maximise ISA contributions were far more likely to have received advice, Sanlam added, with 59% of those who used the full £20,000 allowance saying they regularly saw a financial adviser against just 42% of respondents who did not maximise their annual contributions.

Sanlam UK head of commercial, Elliott Silk, commented: “The tax-free annual allowances for ISA and pension contributions are an extremely important component of any savings plan. Those that have the ability to max out their contributions should do so to take full advantage of the tax-free savings on offer.  

“While the allowances may seem unreachable at first, by breaking down contributions over the course of 12 months many people may find it a more achievable goal. We would urge anyone unsure as to which product is right for them or how to structure a financial savings plan to reach out for professional advice and guidance.”

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