ISAs are set to welcome increased amounts of money this year, even though more onerous tax burdens will see savings levels amongst high earners drop.
The amount saved or invested each year by those with earnings in excess of £100,000 is expected to decline by 10% in 2011, new research from HSBC has revealed.
The survey found that the average amount that will be added to savings pots by high earners in 2011 will decline from £20,314 in 2010 to £18,255 this year.
Over the course of 2010, the largest proportion of high earners' savings was invested into instant access bank and building society accounts (£4,732).
ISAs (£3,655) were the next most popular savings vehicle, while fixed rate bonds welcomed an average of £2,160.
Those wanting to prepare specifically for their retirement put £2,451 into a company pension scheme and £2,075 into a personal pension.
However, when high earners were asked about how much and where they hoped to save in 2011, almost all types of savings and investment are predicted to see a decline.
The largest drop is expected to be in fixed rate bonds (-34.3%), while unit trusts and investments funds (-27.5%) and commercial property (-23.2%) are also set to prove increasingly unpopular.
Investment into ISAs will be the only area to see an increase in the coming year.
An average of £3,961 is expected to be placed into ISAs in 2011, up 8.4% from £3,655 in 2010, a move which most likely reflects the increase in the ISA allowance which is coming into force in April.
Following last year's Budget, ISA allowances will now rise each April, based on the rate of inflation in the preceding September.
Therefore, from 6 April this year, savers will be able to invest £10,680 in a stocks and shares ISA, up from £10,200 at present, with up to £5,340 in a cash ISA, up from £5,100.
"High earners were hit with a number of additional taxes in 2010, with the introduction of a 28% capital gains tax rate, the introduction of the 50% tax rate coupled with the removal of their income tax personal allowance and the withdrawal of child benefit, which could all affect their ability to save," said Richard Brown, head of savings and investments at HSBC.
"However, despite widespread concern over rising unemployment and the VAT rise this month, it seems affluent consumers have decided to defer their savings for the time being, instead choosing to increase expenditure to maintain their lifestyles. It will remain to see as the year progresses if this is indeed the correct decision."
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