A rise in personal savings during the pandemic has led to a boom in Isa investments, with £1.5bn flowing into the funds in April, according to the Investment Association.
The April 2021 figure represents the highest level of April inflows in over six years. The net inflows are almost double that seen in April 2020, which saw £650m flowing into Isa funds.
April sees the switch to the new Isa season, which began on April 6.
Chris Cummings, chief executive of the Investment Association, said: “Savers have once again shown the appeal of Isas in helping to get into the savings habit and build up a retirement nest egg.
"Comparing the strong Isa flows this April to the year before shows investors have been moving money into funds to make the most of tax incentivised savings and to deliver better returns amidst low interest rates on cash savings."
Meanwhile equity funds saw the highest level of net flows at £2.9bn.
Global equity funds saw net inflows of £1.96bn, and UK equity funds experienced £46m of net retail inflows.
The figures were in sharp contrast to flows in February, when £1bn was pulled from UK equity funds.
UK smaller companies funds saw inflows of £240m, the highest level seen since the record high of £279m in December 2019.
Kate Marshall, acting head of investment analysis at HL, said a successful vaccine rollout, the reopening of the economy and the prospect of a rebound in consumer spending meant many more investors were feeling hopeful about the UK's future.
She added: “This increase in risk appetite can also be seen in the popularity of UK smaller companies funds, which saw the highest inflow since the record in December 2019.
“Smaller businesses tend to be more domestically focused than their multinational mega-cap peers and have the chance to benefit as the economy gets back on its feet."
Cummings added: “The overall inflow to UK equities for a second consecutive month follows a sustained period of outflows and points to investor confidence continuing to grow as the UK looks to leave the pandemic economic consequences behind.
“In particular, the rising inflows to more domestically-focused UK smaller companies funds shows investors are increasingly positive that the post-Brexit UK economy will grow strongly as it opens up. In another strong month for responsible investment funds, savers invested £1.6bn, taking the total inflows to £13.5bn over the last year - representing 30 per cent of flows into funds."