Cash takes a back seat for ISA investors in 2012

Wednesday, 14 March 2012 09:54

One in three investment ISA holders has diversified away from cash to equities as a means to gain returns in the current environment, a new study suggests.

With interest rates at an historic low for a record three years, ISA investors are feeling disillusioned with returns on cash investments and continue to take a bullish approach to investing in equities, according to research by Barclays Stockbrokers.

The survey of ISA clients shows that three quarters have invested in an equity ISA this tax year.

A third of investors have already taken full advantage of this tax year’s allowance of £10,680, specifically because they were seeking better returns than those available from cash.

Two thirds of poll respondents said they always use their full ISA allowance every year, while 55 per cent of those who have not yet invested in an ISA this tax year still intend to do so before April 5.

Catherine Penney at Barclays Stockbrokers said: “The Bank of England has held the base rate at 0.5 per cent for three years and our research shows that the low interest rate environment has prompted investors to reassess their investment decisions.”

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