Over nine in ten British adults are not making full use of their tax-free savings allowance, it has emerged.

Research by Lloyds TSB Savings found that eight per cent of Britons are using both cash and stocks-and-shares individual savings accounts (Isas) to their full potential but 46 per cent do not have either product.

Alvin Hall, independent financial expert, explained that people who have money lying around but are not taking advantage of any Isa products are effectively "throwing away free money".

"With the tax year end approaching, now is the time to use it or face losing the tax-free benefits altogether," he said. "The changes to Isa regulations this year mean there's even more opportunity to save tax free."

Liz Hogbin of Lloyds TSB advised savers to shop around for Isa products as there were many good deals to be had, despite 27 per cent of savers not realising it was possible to switch.

Marks & Spencer Money estimates that savers who do not make the most of their tax-free accounts are losing out on £23 million a year.

© Adfero Ltd