ISA investors withdraw more than they save

The net outflow from the country's individual savings accounts amounted to 23.5 million in September.

15:03 26 October 2004

The net outflow from the country's individual savings accounts amounted to 23.5 million in September, according to the Investment Managers Association.

IMA noted that this represented the first net withdrawal since ISAs were launched in 1999, and followed a record low net inflow of 25 million in August.

Richard Saunders, chief executive of IMA commented that the trend "shows that efforts to attract investors back to the market are not yet succeeding".

"Despite stronger markets in September, investor confidence remains low," he added.

IMA suggested that fall in confidence in ISAs was likely to be based on government action to increase interest rates but cut tax benefits on the special accounts.

Mr Saunders also pointed to a general lack of certainty in the future of investments in the current financial climate.