New research shows that funds invested in "maxi" individual savings accounts (ISAs) is at an all-time low.
Today, holdings in maxi ISAs represent less than a quarter of the total sum invested in ISAs, having constituted more than half when the tax-free savings and investment vehicles were first launched seven years ago.
Maxi ISAs combine a mixture of cash and stocks in a tax-free wrapper, while the more popular mini ISAs can have just one or the other.
The research, by Alliance & Leicester Investments, warns that people are put off maxi ISAs because of their perceived complexity.
Yet the same study found that 78 per cent of those who had an equity-based ISA, mini or maxi, had found it easy to understand.
Lindsey Henson, Manager for Investments at Alliance & Leicester stated: "Investors don’t have to take high risks with their money to achieve decent returns. There are a wealth of maxi ISA products available, some of which are very low risk but still provide returns above those of a savings account."
Interestingly, only 52 per cent of respondents regarded tax efficiency as a central factor in investment decisions.
Mr Henson stressed: "ISAs are a no-brainer. As most investment products can be wrapped as an ISA, they should always be considered as part of an investment portfolio. Maxi ISAs enable investors to reap tax efficient returns on £7,000 of investments every year, which is important for those with large sums to tuck away." To read more about ISAs, click here.
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