23 February 2010

But with only one month left only 15% of eligible savers have used new allowance

Brewin Dolphin, one of the UK’s largest independent private client investment manager, is witnessing a record year for ISA subscriptions following the extension on the ISA limit, with over £161 million invested up to the end of February 2010 – over £75 million more than this period last year. 

These figures are contrary to the findings of National Savings & Investments – who announced yesterday that only 15% of those eligible planned to take up their increased allowance, while 25% were not even aware that it had changed for the over 50s in this financial year.

Equity ISAs are increasingly popular among our clients, due to the credit crunch that has beaten down other savings options and resulted in the lowest base rate ever.  Currently, weak rates on cash have seen more individuals opt for equity (stocks and shares) ISAs for better returns, albeit with a higher level of risk, since the limit was increased to £10,200 (for over 50s*) – all of which can be invested in an equity ISA as opposed to only £5,100 which can be saved in a cash ISA.

Charlotte Black, Head of Corporate Affairs at Brewin Dolphin, commented: "Now has never been a better time to make the most of investing in tax-free savings vehicles.  ISAs offer the best of both worlds with the cash-only option and the equity ISA - the latter proving popular due to the low interest rates we’re currently experiencing, and for investors aged 50 and over there’s the further advantage of the increased ISA limit which enables them to save the maximum amount which benefits from a tax free return."

These increased allowances have coincided with a stock market recovery, subsequently aiding a pick up in equity ISA sales.  According to the Investment Management Association, a record £23.6 billion was invested in investment funds during the first 11 months of 2009 – more than 10 times the amount invested during the same period in 2008.

"ISAs are a flexible savings vehicle and any income or capital withdrawn from them is tax free; for those on the cusp of retirement this could save them from paying higher rate tax on other income, so it maybe a good route to build up an ISA fund.  Brewin Dolphin has already seen more than a 40 percent increase in ISA subscriptions so far year on year – reflecting the move out of cash and into equities - and with one month to go until the end of the tax year, investors should make the most of the timeframe left to take advantage of this tax break”, continued Black.

*The primary increase was only valid for those over 50 since October 2009, and will be valid to everyone over the age of 18 from April 6 2010. 

-Ends-

The value of investments and any income from them can fall and you may get back less than you invested.

No investment is suitable for all people and should you have any doubt about this service you should consult an authorised financial adviser. 

The information contained in this presentation has been taken from public sources and is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness.  The opinions expressed in this presentation are not necessarily the views held throughout Brewin Dolphin Ltd. No Director, representative or employee of Brewin Dolphin Ltd accepts liability for any direct or consequential loss arising from the use of this document or its contents.

Past performance is not an indication on future performance.

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