Individual Savings Accounts surge in popularity as interest rates stay low

INDIVIDUAL Savings Accounts (ISAs) are still the most popular investment in the UK, remaining number one for the fourth consecutive year, according to the latest research into financial products.

Two thirds of people have invested in a cash ISA over the past year, according to the annual investor confidence index by broker TD Waterhouse.

Stocks and shares ISAs were the second most popular choice with almost half – 47 per cent – of respondents investing in them.

They are particularly popular in the South East where over 60 per cent say that they have invested in this type of ISA.

TD Waterhouse said the trend from the survey was apparent in its ISA account opening activity, with new account openings having doubled in the first few months of this year compared to the same period last year.

“The combination of continually low interest rates and last year’s increase in ISA investment limits to £10,200 has certainly helped to boost the popularity of equity ISA investment,” said Darren Hepworth, Trading and Customer Services Director at TD Waterhouse.

ISA allowances are set to increase again to £10,680 on 6 April, providing investors with more scope to buy shares and equity funds through their ISA or diversify into international markets.