Isa sales turned positive for the first time in seven months in March, ahead of the end of the tax year, as savers maxed out their allowances before losing them.
UK savers ploughed £363m into the savings schemes - which are exempt from capital gains tax - , with an additional £256m in the first 5 days of April, according to figures from the Investment Association.
Overall net retail fund sales were positive, with mixed assets the standout investment class, hitting £890m.
The statistics showed an additional £1.5bn was invested in UK authorised funds in March.
Chris Cummings, CEO of the Investment Association, said: “The start of the Isa season kicked off in March with a total of £620m invested into Isas throughout this month and into the first five days of April.
"With an additional £23m being placed into Isas in comparison with the same period last year it is positive to see growth in this high-street investment product.”
Malcolm Steel, director at advice firm Mearns and Company in Edinburgh, said: “The numbers are healthy for Isas and it’s great that people are taking advantage of tax allowances."
Commenting on the growth referred to by Mr. Cummings, Mr. Steel said: “Pension freedoms could be a source of higher flows into Isas”.
Looking at asset class sales, Alastair Wainwright, fund market specialist at the IA, said that while mixed asset was again the best-selling investment class, equity funds collectively saw an inflow of £554m, helped by the Global sector.
Mr. Wainwright added fixed income had seen an outflow for the second month in a row, as investors stopped allocating to the Sterling Strategic Bond sector.
In addition, he pointed out that funds under management fell by 2 per cent, commenting: “Concerns about a trade war between the US and some of its closest trading partners, including China and the EU, led to negative returns in equity markets and some bond markets.”
