Research from fund platform rplan found 18% of ISA customers will invest more than last year, while 35% will invest about the same and 12% will invest less than a year ago.

But nearly a quarter (22%) of ISA users said their risk appetite had decreased over the last year versus just 17% who said it had increased.

This is perhaps unsurprising as global stock markets have had a very shaky start to 2016 amid concerns of a slowdown in China and falling oil prices.

The findings suggest ISA users have become more cautious, with only 26% saying they currently see financial markets as attractive versus 34% a year ago. Three in five (60%) said they will invest their ISA allowance in cash, versus 51% a year ago.

What are people investing in?

Around one in four ISA users (27%) said they’ll turn to the stock market for returns this year because interest on cash is so low. The most popular investment sector among ISA users was UK equities (23%).

This was followed by property (13%), UK bonds (9%), emerging market and European equities (both 5%) and US equities (3%). One quarter of ISA users said they are still undecided.

January volatility and Brexit key factors

Stuart Dyer, rplan.co.uk’s CIO, said: “Our research shows UK investors are slightly more cautious than they were a year ago. No doubt the volatility in January and Brexit vote later this year are factors in that. But they do need to take a longer term view of five years or more and use this year’s ISA allowance before they lose it.

“If they are concerned about Brexit then they might wish to consider investing with active managers rather than taking a passive approach, as active managers have more opportunity to add value in volatile conditions.”

Dyer added that in times of volatility, investors should look to diversify their portfolio.