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Press Release

Monday 4 October 2010

RECORD ISA SALES FOLLOWING HIGHER ALLOWANCES – IMA FIGURES SHOW

  • ISA inflows have averaged over £400 million a month net since October last year, when the ISA allowance was raised for the over 50s
  • ISA inflows also increased in April this year, when the ISA allowance went up for the under 50s
  • Half (47%) of investors say they would invest more if the ISA allowances were raised further

A year since the ISA limit was raised,* figures from the Investment Management Association show that investors have a renewed enthusiasm for investing in stocks and shares ISAs. This reinforces what investors themselves say.  According to new IMA research, around half (47%) of existing investors say that they would save even more if the annual allowance was raised further.  All types of people said the same thing, from empty nesters to couples who have yet to start a family.** 

In October last year the ISA allowance for the over-50s increased from £7,200 to £10,200.  That month’s net ISA sales were the highest for any October since ISAs were first launched in 1999.  Since then gross ISA sales have averaged over £400 million a month, more than double the same period a year earlier, before the increase in the allowance.***

There was also an increase in April 2010, when the ISA allowance went up to £10,200 for the under 50s, with net sales for April the highest since 2001.

The research also showed, that more than one in three (36%) of investors said they would invest more if long term savings incentives remained consistent, with a higher proportion (44%) saying they would invest more if there was a lifetime tax-free ISA allowance.  There was also some support for greater flexibility, with one in five (21%) saying they would invest more if there was some flexibility to move money in and out of pensions savings.  This figure was understandably higher amongst younger investors, with a third (32%) of couples yet to start a family saying this would encourage them to invest more. 

Richard Saunders, Chief Executive of the IMA comments:

“Our research shows that people are positive about incentives to save – with around half of existing investors saying they would invest more if the annual ISA allowance were raised. 

“The IMA’s figures back this up, with ISA sales at the highest level for many years, following the recent increases in the annual allowance. The inflows we have seen since October last year are the highest since ISAs were first launched. There is a good chance that 2010 could be the best year ever for ISAs." 

- ENDS -

Notes to Editors


*   The Individual Savings Account (ISA) maximum subscription limit was raised, from £7,200 to £10,200, on 6 October 2009 for over-50s savers, and then on 6 April 2010 for all savers.

** The IMA commissioned market research agency Opinium Research to survey 2,100 investors (people holding one or more defined investment products including stocks and shares ISAs, investment funds as well as stocks and shares).  The research was carried out between 9 and 24 August 2010.   
    
***  The IMA’s most recent figures for ISA sales are for August 2010, published 29 September 2010. 

The figures for October 2009 to August 2010 therefore give the most up-to-date picture of sales since the ISA limit was raised in October 2009.

ISA sales – October to August since ISAs were launched

  Net ISA sales - £m Rank Gross ISA sales - £m Rank
Oct 99 to Aug 00 7,847 1 13,174 2
Oct 00 to Aug 01 4,829 2 10,355 3
Oct 01 to Aug 02 2,906 4 7,401 8
Oct 02 to Aug 03 1,410 6 5,767  11
Oct 03 to Aug 04 145 7 6,137  10
Oct 04 to Aug 05 -1,150 10 6,276 9
Oct 05 to Aug 06 -406 8 8,382 7
Oct 06 to Aug 07 -974 9 9,062 4
Oct 07 to Aug 08 -1,722 11 8,911  5
Oct 08 to Aug 09 2,150 5 8,667 6
Oct 09 to Aug 10 4,665 3 14,458 1

ISA sales figures also include PEP sales.

Net retail sales comprise gross sales minus redemptions, which is why it can result in negative figures (i.e. more redemptions than sales). 
Net ISA sales are net sales of investment funds within ISA wrappers.  Gross ISA sales are from sales of investment funds within ISA wrappers including fund sales where investors are switching funds already held within ISAs.

For further information, please contact:
Clare Murphy-McGreevey, Press Officer, IMA, 020 7831 0898 or 0780 960 9964, cmm@investmentuk.org
Ginny Broad, Head of Communications, IMA, 020 7831 0898 or 07834 089332, gbroad@investmentuk.org
Richard Winder, Lansons Communications, 020 7294 3641 or 07970 274 922, richardw@lansons.com
Louise Marriott, Lansons Communications, 020 7294 3654, louisem@lansons.com
Jennifer Stevens, Lansons Communications, 020 7566 9723, jennifers@lansons.com  

About the Investment Management Association
The IMA is the trade body for the UK's £3.4 trillion asset management industry.  The money its members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.  Its role is to represent the industry and promote high standards. 

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