Private investors put more into self select ISAs than a year ago, survey shows

News - Savings

Written by Ray Clancy

Friday, 09 April 2010 12:15

Private investors put in two and half times more into self select ISAs in the first two days of the new tax year compared with a year ago, according to a new survey.

After record levels of investment in the last tax year investors have been quick to take advantage of the new £10,200 annual ISA allowance, the survey from fund supermarket and online stockbroker Interactive Investor has found.

Rebecca O’Keeffe, head of investment at Interactive Investor, said there was a substantial inflow of cash into self select ISAs as investors look for flexibility. ‘More investors than ever are looking to the flexibility that a self-select ISA offers, combined with the potential for better returns compared to those currently on offer via cash ISAs. For higher rate tax payers, especially those who face paying the new 50% tax rate, using all available tax advantages makes perfect sense,’ she said.

She explained that investors now have the chance to save up to £10,200 tax free either in a lump sum or through regular payments of £850 per month. ‘Not everyone will have cash available but if you are going to invest this year an ISA is the place to start,’ she added.

A recent survey of over 1000 private investors also revealed that over half, 55%, have a positive view on the investment outlook over the next five years. One in four, 27%), have a neutral view on the investment outlook while under one in ten, 8%, have a negative view on the markets over the next five years.

‘The generally positive outlook so far this year has meant investors are looking for growth opportunities over the long term. You should not invest unless you have a minimum five year investment horizon, which will hopefully allow you to ride out any possible short term market dips,’ said O’Keeffe.

She revealed that as a result of increased investor confidence, the popular funds over the last month have been those that invest in emerging markets, including Latin America, India, China and South East Asia. ‘Despite record growth in these markets over the last 12 months investors clearly see them as good long term bets,’ she added.