Savers have increasingly been turning to stocks and shares individual savings accounts (ISAs), as the search for a decent return on savings intensifies.
The popularity of stocks and shares ISAs soared in the weeks leading up to the end of the tax year in April, with sales hitting a nine-year high.
According to the Investment Management Association (IMA), an incredible £956 million was invested in stocks and shares ISAs between 1 March and 5 April 2011.
Net sales of £3.7 billion for the 2010/11 tax year overall made it the second best tax year of the past decade.
With the base rate of interest having remained at its record low of 0.5% for more than two years, savers have been struggling to find savings accounts which pay a decent rate of return.
Investing in stocks and shares provides the potential for greater rewards, but is balanced by the risk that money could also be lost.
Since the start of the new tax year, the overall ISA allowance has increased to £10,680, which equates to a regular contribution of up to £890 a month.
All of this allowance can be used for stocks and shares investment.
If you don't have a lump sum to invest then drip feeding money into the market is a great way to build up your savings pot.
However, it is vital to give proper thought over which type of fund to invest in.
A recent study found that most equity ISA investors show little interest in managing their ISA holdings.
One in ten ISA investors admitted it takes only 'a matter of minutes' for this vital decision to be made.
If you're unsure as to where to invest, Skipton Financial Services will be able to help.
They can compare over 1,100 ISAs and funds from over 60 providers – if you need help in choosing the right investment, call Skipton Financial Services free on 0800 731 5342
A product such as the Aberdeen Investment Trusts ISA and Share Plan also offers access to a wide range of investments and funds.
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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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