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Investors undecided about ISAs

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Many active investors are either undecided or will not be investing in Individual Savings Accounts (ISAs) before the end of this tax year, according to New Star Investment Funds.

A survey by New Star looked into the attitudes to ISAs coming up to the end of the tax year deadline of 6 April 2008. Of those surveyed, 62% planned to forfeit their ISA allowance this year, with only 38% considering taking out an ISA before 6 April. The reasons for their reluctance included nervousness about the markets and general economy (10%), with 25% claiming they were simply undecided about whether to take out an ISA or not.

Richard Wilson, marketing director at New Star, said: “The opportunity cost to investors over the long term from both a tax and investment perspective could be significant. The survey suggests that the majority of investors may be relinquishing the opportunity to protect up to £7,000 from the clutches of the taxman.”

Wilson added that investors considering an ISA should take note of the fact that over the past 20 years cash has returned 308.5% compared to superior returns of 607.6%, 581.1% and 417.8% from direct UK commercial property, UK equities and bonds respectively.

He continued: “Long-term investors need to ask themselves this: if they look back in 20 years time, will they regret a missed opportunity and past short-term pessimism?

“Above all else, this research highlights the need for investors to seek independent financial advice.”

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