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Sixty per cent of investors to optimise ISA limits

Sixty per cent of investors to optimise ISA limits

Category: Savings

Updated: 16/03/2010
First Published: 16/03/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Six in ten investors are set to take advantage of the enlarged ISA limits that come into play in the new tax year.

As of 6 April, all investors aged 18 or over will be able to increase the amount they invest in an ISA to £10,200, all of which can be put into a stocks and shares product or part stocks, part cash (maximum £5,100 in cash).

These increased limits are already available to investors aged 50 or over, although research conducted by The Share Centre found that just one in five of those eligible have upped their tax-free savings to the maximum amount.

A further 19 per cent chose to invest above the current £7,200 limit, currently available to those under 50.

However, those eligible to do so from April onwards look likely to do so in greater numbers, with 60 per cent saying they would invest the full amount.

Furthermore, 75 per cent of respondents said they had used at least part of their 2009/10 ISA allowance. While only 37 per cent have fully subscribed in this tax year, another 18 per cent plan to invest more before the 2010/11 season begins.

Graham Spooner, investment adviser at The Share Centre, said: "With interest rates at historic lows, its vital investors take advantage of the increased allowance and protect what they can from the taxman. The new Stocks and Shares ISA limit will mean investors can stash away an additional £3,000 from the taxman.

"While see-sawing markets have left some wary of investing in equities, it is worth bearing in mind that returns from equities have consistently outperformed cash, decade-on-decade over the last century, apart from the 2000's.

"This underperformance could be excused when you consider the stock market was extremely volatile during this decade."

Separate data from Barclays Wealth has revealed that three quarters of investors plan to put their money into an investment ISA when the new tax year begins.

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