The deadline to invest in an ISA is approaching.
More people are investing their capital in ISAs to supplement their living costs.
Investment in stocks and shares ISAs will be taken up by one million people before the April 5 deadline, according to a new survey.
Schroders, the asset management company which compiled the research, suggested that more money is being placed in ISAs because of the poor rates on cash deposits – many savings accounts on the market have low interest rates, which is resulting in the erosion of consumer savings.
The firm also found that more people invested in an ISA last year than at any time since 2001. This works in contrast to the figures collected over the last two years where a record number of people cashed in their ISAs following the financial crisis and the ensuing stock market fears felt by British consumers.
Robin Stoakley of Schroders said: “The appetite for stocks and shares Isas is understandable given the paltry returns currently available on cash deposits and the fact that rates for conventional annuities are falling. Increasingly investors are turning to ISAs as a means to provide additional income to supplement rising living costs, as well as to provide long-term capital growth”.
Currently, savers can set aside up to £5,100 a year in a tax-free cash ISA. Just under 20 million people have an ISA, which equates to a total investment of about £300 billion.