Poor planning means taxpayers will have to fork out nearly £5bn in avoidable taxes in 2015, a rise of £200m on last year, research reveals.
Some £4.9bn is expected to be wasted this year through inefficient tax planning, about £165 on average per individual, data collected by Unbiased.co.uk and Prudential shows.
Tax relief on pension contributions is by far the biggest proportion of tax wastage, with 4.2 million workers not saving into a pension missing out on £2.9bn in unused pension tax allowance.
Savers are paying £1.3bn too much by not moving their money into Isas, while individuals are losing £550m to inheritance tax by not placing life protection policies under trust.
A survey of 2,000 adults also reveals nearly three quarters of taxpayers have not attempted to reduce their unnecessary tax spent over the last 12 months, with 45 per cent believing they already pay the minimum amount.
Unbiased.co.uk chief executive Karen Barrett says: “Changes to tax legislation, as well as the new pensions freedoms, make it seem less stressful to take no action, but there are simple steps that will make a real difference to your finances. Tax is an area where professional advice can make a real difference, over both the short and long term.”