As the deadline for using up the annual Individual Savings Account (ISA) allowance approaches, the Financial Ombudsman Service has warned that savers should not wait until the last minute to make use of their annual tax free ISA allowance.
Savers can place up to £10,680 into a ISA for the 2011/2012 financial year, this amount is known as the annual ISA allowance. The deadline by which savers can use their 2011/2012 allowance is the 5th of April, when a new allowance will be introduced for the 2012/2013 financial year.
An ISA acts as a tax free wrapper around savings, protecting them from UK Income Tax and Capital Gains Tax.
The Financial Ombudsman Service (FOS) said that complaints tend to rise at this time of year as savers rush to take advantage of last minute deals offered by ISA providers, but warned that savers risk missing the ISA deadline altogether because of the time it takes to set up or transfer into an ISA.
Chief Ombudsman at the FOS Natalie Ceeney said:
"At this time of year, the ombudsman service sees a big increase in complaints about Isas where people have missed deadlines.
"So do not leave it until the very last minute before getting your application in."
From the 6th of April a new ISA allowance for the 2012/2013 financial year will be set at £11,280, up to £5,640 of which can be put into a Cash ISA.