Greater tax-free allowances and defined benefit (DB) pension changes have been hailed as the drivers of another retail fund sales record in April.
Funds saw £4.9bn in net inflows on the month, the Investment Association (IA) said last week, up from a record £4bn in March and £2.3bn in February.
The annual Isa allowance rose from £15,240 to £20,000 in April, and wealth managers say the increased amount has prompted greater interest in funds.
Duncan Blyth, investment research director at Tcam, said: “It’s a 30 per cent increase in the allowance, and for us it’s hard to see any other reason [for the rise in sales]. People tend to invest their Isa money immediately.”
IA chief executive Chris Cummings added: “Many investors decided to start the new tax year by investing their savings through authorised funds.”
The month was the first time in a year that Isa fund sales have exceeded those into pensions. But personal pension sales have been well in excess of historic averages over the past 18 months as a result of continued transfers from defined benefit schemes.
“We have had DB schemes winding up and you are getting strong inflows from DB schemes coming into wealth managers,” Mr Blyth added.
