ISA investments tipped to hit record £40billion mark Go compare with our comparison table

ISA investments tipped to hit record £40billion mark

19 February 2010 / by Andy Davies

An estimated £40billion will have been invested in ISAs by the end of this tax year, Clydesdale and Yorkshire banks have said.

According to the two banks, the amount of money invested in ISAs this tax year is set to hit a record high of £40billion – an increase of £2.4billion on last year's figures – taking the total amount invested since their launch in 1999 to more than £348billion.

Of the total amount invested, the majority – £230billion – has been deposited into cash ISAs, while £118billion has been invested into stocks and shares.  

In their first year, 9.3million ISA accounts were opened as savers invested a total of £28.4billion, with the number of accounts predicted to top 14.8million this year – representing an increase of 59 per cent.

However, whilst the number of accounts and total money invested has increased steadily since the ISA was launched, Clydesdale and Yorkshire have revealed that the average amount invested in an ISA has actually fallen by 10 per cent from around £3,000 in 1999 to £2,700 this year.

Commenting, Steve Reid, retail director for Clydesdale Bank said: "The trend is for an increase in total investments, but for the first five years of ISAs there was a marked decline in the average investment. It is only since 2005/6 that we've seen more people investing more money in ISAs. Given the tax advantages of ISAs we would hope to see this continue."

However, although acknowledging that ISAs have proved popular with investors since their introduction, Mr Reid claims that there is a "huge gap" between how much could have been invested and how much actually has.

"With an average investment of less than half the allowance and only one in four adults taking advantage of ISAs' tax-free status, savers are losing millions in tax unnecessarily," he said.

© Fair Investment Company Ltd

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', eventAction: 'Account', eventLabel: 'Henderson Strategic Bond Fund' });">Henderson Strategic Bond Fundyes
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', eventAction: 'Account', eventLabel: 'Invesco Perpetual Corporate Bond' });">Invesco Perpetual Corporate Bond ISAyes
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', eventAction: 'Account', eventLabel: 'Artemis Income ISA' });">Artemis Income ISAyes
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', eventAction: 'Account', eventLabel: 'MandG Corporate Bond' });">M&G Corporate Bond ISAyes
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†† Income payments are dependent upon the FTSE 100 Index.

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