More than one in four people (28 per cent) who have an Isa and are aware of the new Isa limit say it encouraged them to open or save more into their account, according to Fidelity Personal Investing.
Since ‘Nisas’ launched in July 2014, savers put £1,985 more on average per investor into stocks and shares Isas in the 2014 to 2015 tax year compared with the previous tax year, the firm said. This constitutes a total increase of 55 per cent.
From 1 July 2014, Nisas had a £15,000 allowance, which has now increased for the 2015 to 2016 tax year to £15,240. Savers can either invest in a cash Isa, an investment Isa or a combination of the two.
Tom Stevenson, investment director at Fidelity Personal Investing, said that nearly a year after the Nisa allowance launched it was encouraging to see a positive ‘Nisa’ effect.
He said that Fidelity Personal Investing had calculated that if a saver invested £15,000 into the FTSE All Share index over the 10-year period from 29 April 2005 to 30 April 2005, they would now be left with £33,344.26.
In contrast, if they had invested £15,000 into the average UK savings account over the same period, they would be left with £16,271.25, making a total difference of £17,073.01.
Mr Stevenson said: “Our research shows an uplift in the number of investors taking advantage of the new Isa as well as more being invested into stocks and shares Isas.
“The beauty of the new flexible Nisa, with its increased Isa allowance of £15,240 this tax year (2015 to 2016), is it gives investors the ability to invest more money in a broader range of investments and in a tax-free environment.
“With inflation rates remaining at record lows, investing in a stocks and shares Isa over the long term is worth considering.
“Although this is a more risky option than cash, as your money will be exposed to the vagaries of the stock market, the true value of a stocks and shares Nisa will manifest itself over the long term.”
ruth.gillbe@ft.com
