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A third of investors expect to top up ISA when limit increases

Lucinda Beeman
Written By:
Lucinda Beeman

Nearly one third of investors plan to invest more in their stocks & shares ISA when the annual allowance rises on 1 July.

In the latest Budget, Chancellor George Osborne increased the annual tax-free ISA limit from £11,520 to £15,000.

He also changed existing rules to allow investors to choose whether to keep cash, shares or both and to enable ISA holders to switch between the two throughout the year.

Research from Halifax found 29 per cent of investors plan to invest more in their stocks and shares ISAs when the annual limit increases, with 20.9 per cent planning to invest the maximum amount possible.

This is compared to 22.7 per cent of investors who said they won’t be affected by the changes as they can’t afford to top up their ISAs.

The study also found that only 10 per cent will take advantage of the new rules allowing investors to switch money back and forth between stocks and shares and cash throughout the year.

Damian Stansfield, managing director of Halifax Share Dealing, said: “While investors will soon be able to move their money between stocks & shares and cash ISAs, the Halifax Share Dealing Market Tracker shows the numbers planning to use this facility are low. As with all investment-related decisions, investors should always do their own research before making any decisions that will impact on their returns.”

Meanwhile, optimism in stock markets appears to be increasing among investors.

Short, medium and long term optimism in the FTSE 100 all increased in May, the study revealed.

Half of investors expect the market to be higher in six months than it is today, while 70 per cent expect it be higher a year from now, and 86 per cent expect it to be higher in five years.

In addition, more than half of investors believe the value of their portfolio has increased over the last six months.

According to the Tracker, financial services is the most popular sector, with 60 per cent of investors allocating money to stocks in this area. Mining and energy companies are a close second, but the percentage of investors holding such stocks has fallen by 12 per cent since last year to 57 per cent.