Sales of fund based Individual Savings Accounts (ISAs) increased to £82m in January this year, new research has found.

The research from the Investment Management Association showed that net sales experienced a sharp year on year increase from £39m in January 2005 to £82 million in January this year.

The most popular type of funds in January were UK All Companies funds, accounting for 28% of gross ISA sales.

UK investors can invest in funds on a tax free basis by using ISAs, and F&C Asset Management welcomed the increase in the investments and argued that ISAs still have significant benefits for investors.

Jason Hollands, head of communications at F&C, said: “This latest data covering the first month of 2006, which shows a 110% increase over the same month last year, is therefore a very encouraging sign that ISAs are starting to register on the people’s radars again.

“Whilst the scale of the rise in net ISA sales is dwarfed by an even greater increase in total net sales of retail funds – from £225m in January 2005 to £999m in January 2006 – ISA sales are a good indicator of the savings sentiment of the smaller investor, those investors who have long shunned the markets,” he added.