ISA Rates

Savvy savers paid a record amount into investment funds in 2009 as they looked for a better return on their cash than putting it straight into the bank.

According to the Investment Management Association (IMA) net sales of UK-based unit trusts and open-ended investment companies (OEICs) shot up to £25.8bn, the highest level since records began in 1992.

A spokesman for IMA stated that ‘low returns on saving accounts have caused consumers to look at putting their money elsewhere, namely share investments. The recession also caused consumers to hold onto their money and increase their saving levels’.

In total over £9.9bn of new funds were invested in bonds and £7.3bn in shares over the year, a sharp contrast to the year prior (2008) when people withdrew over £1.3bn from the UK stock market.

Chief executive, Richard Saunders of the IMA said ‘investors have prudently chosen a diverse investment portfolio across asset classes and geographically. It is good to see people once more investing via ISAs, after five year in which ISA’s saw higher levels of withdrawals than investments’.

Investments in ISAs reached £2.8bn, the highest since 2001. The values of funds under management have also reached record highs. At the end of December funds under management totalled £481bn. £119bn more than 2008.