2007-08 tax year is the worst for Isas

Investments in stocks and shares Isas have plummeted as the 2007-8 tax year has been dubbed by experts as the worst year on record for sales of stock market Isas.

In the past, there has been a rush during March as people use their tax-free £7,000 allowance before the annual 5 April deadline as financial advisers say ’use it or lose it’.

A survey by YouGov for Barclays Stockbrokers and research for John Duffield’s New Star Asset Management indicates 62% of active investors won’t be investing their Isa allowance this year.

Figures from the Investment Management Association show that investments in stocks-and-shares Isas amounted to only £762 million at the end of February (the first 11 months of the financial year). That compares to £1.787 billion that was invested in the whole of 2004-5.

Some banks and building societies say equity Isa sales have slowed markedly in recent months compared to 12 months ago.

Many surveys say investors are nervous with nearly half of people saying the turbulence in the stock markets has made them more cautious.

However, Tom Ryan, director at Barclays Stockbrokers, says he has seen a 10% increase in stock-market Isa investments in this financial year. The Derbyshire Building Society has reported a ’slight uplift’.

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