ISAs boosted by last ditch savings
13/05/2011
Consumers paid almost £1 billion into ISA accounts around the turn of the tax year, making it the strongest ISA season for nine years for investment funds.
The Investment Management Association revealed that between March 1 and April 5 a total of £956 million was paid into UK-based unit trusts and open-ended investment companies (OEICs), which is the highest level for the period since 2002.
With investors rushing to use their tax-free savings allowance before the start of the new tax year, an estimated £349 million was put into ISAs between April 1 and April 5.
This was more than double the £152 million paid in during the same period in 2010.
Despite the last ditch rush, overall ISA sales for 2010/2011 were marginally lower than the previous year at £3.68 billion, compared with £3.99 billion.
The performance of the past two years marks a significant turnaround for the sector, which saw more money taken out of ISAs than was paid into them for four consecutive years between 2004/05 and 2008/09.
Jane Lowe, director of markets at the Investment Management Association, said: "The last two tax years have together seen a big jump in ISA inflows to more than £7.5 billion.
"This coincides with two increases to the annual allowance in October 2009 and April 2010 and compares starkly to ISA outflows of over £5 billion over the preceding five years."
Copyright © Press Association 2011
