Consumers cotton on to ISAs

New research from the Investment Management Association reveals that ISAs appear to be more popular than ever.

09:26 14 May 2004

New research from the Investment Management Association reveals that ISAs appear to be more popular than ever.

Its survey, "Attitudes to Investment Funds", shows that when questioned in November 2003, 57 per cent of respondents had already taken out an ISA for the 2003/04 tax year.

This represents an increase of five per cent from the previous year and the highest total since the introduction of ISAs in 1999.

The survey also highlights that those taking advantage of ISAs were predominantly basic rate taxpayers. They amounted for 55 per cent of the total, in comparison with only 18 per cent from the higher rate bracket.

Mini ISAs continue to be the most popular form of ISA investment, commanding 53 per cent of the market.

Cash was the favourite component, accounting for 77 per cent of responses, although the popularity of the stocks and shares component returned to healthy levels previously seen in 2001 - 36 per cent.

Of those asked, 64 per cent said they would hold onto their investments during rough stock market times, compared with only 5 per cent who said they would sell.

During such periods of instability, investors apparently continued to diversify their holdings, with respondents investing on average in 4.9 funds across 4.2 fund management companies.