Early ISA applications have soared by more than 50% compared to last year, according to Fair Investment Company. In the first three days of 2009, the firm received 228 ISA applications, for the same period this year, the figure had risen 52% to 347.
Nick Scarrett, head of investment and pensions, says there could be a number of reasons why the firm has received so many more ISA applications this year than last.
He says the extra £3,000 tax efficient allowance is substantial, and this may well have made many investors take another look at ISA investment as a more significant part of their investment portfolio. He also suggests the fact that people are realising how much more they can gain by making use of their tax free savings early could be a significant factor.
"Making a lump sum ISA contribution at the beginning of the season is the most efficient way to use your ISA allowance because you then have the entire tax year in which to earn a return on that cash," he said.
Christina Jordan of lovemoney.com agrees. She is encouraging investors to make the most of their tax free allowance as early as possible reminding investors that if they invest now, they have an entire 12 months to build-up their balances before next year's contribution deadline.
"Not only can it be stressful trying to open new accounts when you are up against it, but you will also miss out on months and months of tax-free interest by holding off," she said.
And Andy Hutchinson from Nationwide says despite the fact their research shows that around two thirds of the total ISA business in the savings industry happens between February and May, he expects to see some activity now as people try and get in early.
"Now that the new tax year has started, some savers' attention will be switched onto saving as early as possible in an ISA to maximise their tax benefit," he said.
© Fair Investment Company Ltd