ISAs: Investors urged to maximise tax-free savings allowance Go compare with our comparison table

ISAs: Investors urged to maximise tax-free savings allowance

04 October 2010 / by Paul Dicken

Investors are overlooking their annual ISA allowance and failing to maximise their returns with stocks and shares ISAs, an investment management firm has said.

A survey of 2,000 people carried out for Fidelity Investment Managers found that 42 per cent of people are not using their full tax free allowance for ISA savings, with just one in 10 choosing to invest in a stocks and shares ISA.

Investment director at Fidelity, Tom Stevenson, said: “Last year we saw unprecedented levels of ISA investments in October, generated by the increased allowance for over 50s. It is disappointing to see that the same interest will probably not be repeated this year, and that people are simply not making the most of their ISA.”

Stevenson described ISAs as a fantastic use-it-or-lose-it tax perk, and encouraged people who wait until the end of the tax year to remember the difference investing early can make.

“Our analysis shows that those who have historically chosen autumn for their investment, rather than leaving it to the last minute, could have gained more than £8,400 extra.”

The additional £8,400 is based on investment growth in the FTSE All Share fund over 15 years.

Figures out on 2 October from the Investment Management Association (IMA) showed that the changes to the ISA allowance for over 50s last year and for the under 50s this year helped push up sales of stocks and shares ISAs.

A survey for the IMA also showed that almost half of investors would save even more if the tax-free allowance was raised.

The allowances for over-50s went up in October 2009 to £10,200 and for under-50s in April 2010. These allowance increases saw ISA sales go up at those times, with the average sales now over £400million a month.

In the period October 2009 to August 2010, ISA sales have almost doubled compared to the same period between 2008 and 2009.

In the IMA poll, 44 per cent of respondents said they would invest more if there was a lifetime tax-free ISA allowance.

Younger investors in the poll said allowing some flexibility on moving money in and out of pension savings would encourage them to save more.

© Fair Investment Company Ltd
 

 Product NameISA OptionIncome YieldMore Info
', eventAction: 'Account', eventLabel: 'Schroders Monthly High Income' });">Schroders Monthly High Income Fundyes
See Details
', eventAction: 'Apply Now', eventLabel: 'Schroders Monthly High Income' });">More Info >
The Schroder Monthly High Income Fund aims to generate a high income, whilst not compromising capital, by investing in a diversified basket of fixed income securities. 100% Discount off Initial Charges.
', eventAction: 'Account', eventLabel: 'Invesco Perpetual Monthly Income Plus' });">Invesco Perpetual Monthly Income Plus Fund ISAyes
See Details
', eventAction: 'Apply Now', eventLabel: 'Invesco Perpetual Monthly Income Plus' });">More Info >
Popular monthly income fund that aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK equities. 100% discount on initial charges.
', eventAction: 'Account', eventLabel: 'Henderson Strategic Bond Fund' });">Henderson Strategic Bond Fundyes
See Details
', eventAction: 'Apply Now', eventLabel: 'Henderson Strategic Bond Fund' });">More Info >
The aim of this fund is to deliver a quarterly income to investors by investing in higher yielding assets, which will include most types of fixed interest securities such as high yield bonds, investment grade bonds and government gilts, as well as having the ability to invest a proportion of the fund in equities. Income is paid to you quarterly.
', eventAction: 'Account', eventLabel: 'Schroders Income Maximiser' });">Schroders Income Maximiseryes
See details
', eventAction: 'Apply Now', eventLabel: 'Schroders Income Maximiser' });">More Info >
The Schroder Income Maximiser Fund ISA aims to deliver a target income yield of 7% pa, also providing potential capital growth. Income is paid to you quarterly. 100% Discount off Initial Charges.
', eventAction: 'Account', eventLabel: 'Invesco Perpetual Corporate Bond' });">Invesco Perpetual Corporate Bond ISAyes
See details
', eventAction: 'Apply Now', eventLabel: 'Invesco Perpetual Corporate Bond' });">More Info >
This highly popular fund aims to achieve a high level of overall return with relative security to capital. Income Paid to you twice yearly. Up to 100% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'Artemis Income ISA' });">Artemis Income ISAyes
See details
', eventAction: 'Apply Now', eventLabel: 'Artemis Income ISA' });">More Info >
One of the leading UK Equity Income Funds. The Fund managers hunt out companies with strong free cash flow and solid balance sheets. Income is paid to you twice yearly. 100% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'Jupiter Corporate Bond' });">Jupiter Corporate Bond Fund ISAyes
See details
', eventAction: 'Apply Now', eventLabel: 'Jupiter Corporate Bond' });">More Info >
The Jupiter Corporate Bond aims to achieve a high level of income with the opportunity for capital growth, through mainly investing in fixed interest securities. Income is paid to you twice yearly. 87.5% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'invesco perpetual high income' });">Invesco Perpetual High Income Fund ISAyes
See details
', eventAction: 'Apply Now', eventLabel: 'invesco perpetual high income' });">More Info >
One of the UK's most popular income fund ISAs the Invesco Perpetual High Income has delivered consistently good long term returns through a variety of market conditions. Income is paid to you twice yearly. Up to a 100% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'MandG Corporate Bond' });">M&G Corporate Bond ISAyes
See details
', eventAction: 'Apply Now', eventLabel: 'MandG Corporate Bond' });">More Info >
The M&G Corporate Bond Fund is a conservative ‘blue chip’ sterling fund that aims to produce a higher return than UK government bonds. Income is Paid to you Quarterly. 100% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'Jupiter Merlin Income' });">Jupiter Merlin Income Portfolioyes
See details
', eventAction: 'Apply Now', eventLabel: 'Jupiter Merlin Income' });">More Info >
The Jupiter Merlin Income Portfolio fund aims to achieve a high and rising income with some potential for capital growth. Income Distributions are made to you quarterly. 95% Discount off the Standard Initial Fund Charge.
* See details.
†† Income payments are dependent upon the FTSE 100 Index.

The value of investments and any return from them can fall as well as rise and you may not get back the full amount invested. Please ensure that you read the Important Risk Information below.