Barclays reveals strong growth in investment ISAs

As the new tax year begins, Barclays Stockbrokers reveals that investors ‘upped the ante' and capitalised on their tax-free ISA allowances last tax year. The UK's largest execution-only online stockbroker discloses that the number of investors contributing to their ISA accounts increased by 22% during the 2011 tax year end period compared to last year.  

Barclays Stockbrokers also reveals that the value of ISA contributions increased by a third with 10% more new ISA account openings.  The level of ISA transfers (where clients are consolidating their existing ISAs) also increased - up by 28% compared to 2010.

In separate research, Barclays Stockbrokers also found that investors intend to make the most of their new tax allowances for the 2011/2012 tax year.  It found that a third of ISA investors (33%) who responded to the survey plan to fund their ISA account with a lump sum right at the start of the new tax year.

Catherine Penney, Vice President, Barclays Stockbrokers, comments: "Interest rates remain low and there appears little prospect of returns from cash ISAs beating inflation. Many of our clients prefer to use Investment ISAs in order to achieve potentially better returns and are prepared to accept the risk in doing so.

"As of 6 April 2011, the tax-efficient opportunities are even greater, as individuals can take advantage of the newly increased allowance and contribute £10,680 to 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.

"It is beneficial to take full advantage of tax allowances early in the tax year - ideally as soon as it begins as this allows investors to shelter an extra year's returns from tax."