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ISAs reign supreme as deposits soar

ISAs reign supreme as deposits soar

Category: Savings

Updated: 04/10/2010
First Published: 04/10/2010

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 It is now over 6 months old so the content may be out of date.

The public's love affair with ISAs appears to have strengthened, with higher limits prompting Britons to place more money in the accounts than ever before.

Savers have put more than £400 million a month into their ISAs since October last year, when the limits were increased for over 50s, figures from the Investment Management Association (IMA).

Over the period between October last year and August 2010, savers put more than double the amount into their ISAs than they did in the same period 12 months earlier.

Enlarged allowances of £10,200, half of which can be invested in cash, were rolled out across the board from April.

As a result, the amount of money invested in the accounts was the highest for the month of April since 2001.

The limits will increase in line with inflation from April next year, but there is a desire to save even more.

Almost half of investors said they would make an effort to save even more if the limits were raised yet further.

There was also some support for greater flexibility, with one in five (21%) saying they would invest more if there was some flexibility to move money in and out of pensions savings.

This figure was understandably higher amongst younger investors, with a third (32%) of couples yet to start a family saying this would encourage them to invest more.

"Our research shows that people are positive about incentives to save - with around half of existing investors saying they would invest more if the annual ISA allowance were raised," said Richard Saunders, chief executive of the IMA.

"The IMA's figures back this up, with ISA sales at the highest level for many years, following the recent increases in the annual allowance. "The inflows we have seen since October last year are the highest since ISAs were first launched.

"There is a good chance that 2010 could be the best year ever for ISAs."

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