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ISA enthusiasm grows as deadline approaches

ISA enthusiasm grows as deadline approaches

Category: Investments

Updated: 15/03/2012
First Published: 10/03/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Enthusiasm for ISAs continues to grow as the deadline for using the 2010/11 ISA allowance draws near.

Investors have until 5 April to make use of this tax year's allowance before the opportunity disappears forever.

However, new research suggests the importance of making full use of ISA allowances might be beginning to get through.

Nearly a third of equity ISA investors intend to invest the maximum amount of £10,200 into their ISAs for the current tax year, the Investment Management Association (IMA) has revealed.

Its Investor Perspectives Survey also indicates a strong belief in the importance of ISA investing, with 70% of respondents saying it is important to take out a stocks and shares ISA each year.

Most supportive of ISAs are families with young children and 35-54 year olds.

When asked what type of investment they intend to make in the next 12 months, 43% of UK investors said they would invest in an equity ISA, compared to 33% who said they would invest in a fixed income ISA.

However, while ISAs are popular and held in high esteem, awareness of the new equity ISA allowances of £10,200 for this tax year and £10,680 for the next tax year remains limited.

Of all equity ISA investors, more than half (55%) did not know the current tax year's annual allowance, while almost two thirds (64%) did not know the limit for 2011/12.

"The ISA remains an extremely popular product with savers, providing the ability to invest tax-free for the future," said Richard Saunders, chief executive of the IMA.

"Our survey reveals a healthy appetite for ISA investing, coupled with a strong belief in ISAs.

"Investors have also signalled confidence in equities."

If you're looking to make the absolute most of your ISA allowance, an equity ISA has to come into your plans.

A maximum of £5,100 can be invested into a cash ISA this tax year, and up to £5,340 from 6 April – the remainder has to go into stocks and shares, although the entire allowance can if you wish.

What next

If you're unsure as to where to invest your ISA allowance, speak to an investment adviser to compare and arrange low cost investment ISAs, funds and unit trusts.

A product such as the Baillie Gifford Investment Trust ISA also offers access to a wide range of investments and funds.

Looking for a cash isa - Compare cash isa rates

Request a FREE ISA Savings brochure now

Download our free Beginner's Guide to ISAs to find out how to use your 2011/12 ISA allowance. You will need a PDF reader such as Adobe Reader to download this guide.

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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