Fewer than half of workers take all their holidays, often blaming pressure of work or fear that being away from the office will damage their career.
One in five employees takes less than a quarter of what he or she is owed, a poll of 2,800 workers found.
Men were more likely than women not to take their full holiday entitlement.
Internet job site reed.co.uk, which conducted the research, said workers were more productive and creative after going on holiday.
Director Paul Rapacioli said: "People are just too busy to go on holiday.
"No matter how pressured work becomes, it is time for British bosses to realise they are losing out if they don't encourage employees to take off all the time they are allowed."
Workers in other European Union countries were more productive, even though they enjoyed longer holidays and a shorter working week.
Two-thirds of those surveyed said they felt more productive after returning from a holiday.
Most workers said they had some of their best ideas while taking a break.
More than half of employers did not insist their staff take all their holidays, the research showed.
The same pressures were blamed for keeping staff at their desks when they should be at lunch.
Research into workplace eating habits by business caterer Eurest showed worried workers are taking shorter lunch breaks than ever and spending less on their meals as the economic slowdown begins to bite.
With the novelty of expensive sandwich shops wearing off, lunchtime spending has dropped for the first time in 12 years.
The average break has fallen to a record low of 27 minutes, down nine minutes from two years ago, as staff stay at their desks to look keen.
The lunchtime drink is also on the way out, with only one in 100 drinking alcohol.
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