A third of Barclays Stockbrokers ISA investors plan to invest now
As the new tax year begins, confident investors are wasting no time in taking advantage of their tax-free ISA allowance. According to research by Barclays Stockbrokers, the UK's largest execution-only online stockbroker, a third of their ISA investors (33%) will invest a lump sum in their ISA account at the start of the new tax year.
The research, conducted among Barclays Stockbrokers self-directed ISA clients, asked how best describes how they usually invest in ISAs. It also found that just over a third (34%) say they invest their ISA allowance with a lump sum at some point during the tax year.
ISA investors also appear to remain disillusioned with the returns currently available on cash and are therefore continuing to invest in equities for greater returns. In the current economic environment, 58% of ISA investors say they are diversifying away from cash or reviewing their portfolio as a result of low interest rates.
Catherine Penney, Vice President, Barclays Stockbrokers, comments: "When it comes to investing tax efficiently, it can be beneficial to take full advantage of tax allowances early in the tax year - ideally as soon as it begins. Investors who use their ISA allowance at the start of the tax year have the opportunity to shelter an extra year's returns from tax, compared to someone who chooses to invest on the last day of the tax year. From 6 April 2011, individuals can take advantage of the newly increased allowance and contribute £10,680 into an Investment ISA. The portfolio will be free from capital gains tax on any growth and income tax on dividends (apart from the unrecoverable tax credit) or interest. With interest rates remaining low, and inflation above 4% there appears little prospect of seeing real returns from cash ISAs in the near future and so many of our clients prefer to hold investments in their ISA to access the potentially better returns available and are prepared to accept the risk in doing so.
"Making the most of your tax allowances is crucial to maximising the returns from investments. Combining an Investment ISA with a SIPP allows investors to be in complete control of their investments whilst also managing the tax they pay. Barclays Stockbrokers offers an extensive range of products that allow investors who have the necessary skills and experience to structure a portfolio to meet their investment objectives and risk profile. They can also adapt their portfolio over time to capitalise on changing market conditions and the requirements of different life stages. The Barclays Stockbrokers Investment ISA and SIPP do not incur administration fees when individuals invest only in funds from our Funds Market. Over 1,000 funds are available at heavily discounted initial commissions (although there are of course charges levied by the fund managers) - with over 90 available with no initial charge at all, including the Global Markets range of funds from Barclays Wealth. Investors can combine these with equities, gilts & bonds, Exchange Traded Funds (ETFs), Exchange Traded Commodities (ETCs) and structured products. ISA and SIPP fees will be payable if these investments are held alongside Funds Markets funds."