After four years where net investments in Individual Savings Accounts UK based unit trusts and open ended investment companies (OEICs) fell, recent figures show that investment in ISAs in March hit a nine year high.

According to the Investment Management Association, a total of £956 million was paid into UK-based unit trusts and OEICs between March 1 and April 5, 2011; the highest level for the period since 2002.

Investors rush to maximise their tax free investments

The figures showed that around £349 million was paid into ISA investments in the last five days of the tax year, compared to just £152 million in the same period in 2010.  Total ISA investments in the tax year were £3.68 million.

The Daily Telegraph reported that ‘the performance of the past two years marks a significant turnaround for the sector, which saw more money taken out of ISAs than was paid into them for four consecutive years between 2004/05 and 2008/09.’

Jane Lowe, director of markets at the Investment Management Association, said: “The last two tax years have together seen a big jump in ISA inflows to more than £7.5 billion.

“This coincides with two increases to the annual allowance in October 2009 and April 2010 and compares starkly to ISA outflows of over £5 billion over the preceding five years.”

Total funds under management hit £583 billion

The Investment Management Association reported that a total of £1.9 billion was paid into all types of unit trusts and OEICs during March 2011.  The total value of funds under management, including money held for institutional investors, rose by 1 per cent during the month to £583.2 billion.

Alan Easter, a director of Willis Owen, said: “These figures show that ISAs are clearly still valued by investors. Despite the squeeze on finances, more and more people are attracted by the tax-free wrapper that investment ISAs offer, and the potential for growth, rather than leaving their savings sitting idly in a low interest bank account.”