Investor confidence is at its highest for 18 months but many potential buyers only intend to put their money into a mini cash Isa, according to Hargreaves Lansdown.

The company&#39s investor confidence coefficient rose to 226 in January – its highest level since July 2002 aside from a brief blip in September but 41 per cent of its clients say they plan to buy nothing but a mini cash Isa this year.

Twenty-four per cent say they are unlikely to buy an Isa of any sort while 10 per cent intend to take out a maxi Isa without committing the full allowance.

Fifteen per cent plan to invest the full £7,000 and 15 per cent say they will use existing investments to fund their Isa. Thirty-nine per cent intend to fund their Isa investment with money on deposit. Forty per cent of those who say they will invest say the most important consideration in choosing an Isa is the tax position while 53 per cent say it is the best investment irrespective of tax advantages.

The survey reveals that many investors are shunning Isas due to tax credits being axed. This was the most cited reason, ahead of others, including age, poor performance of existing Isas and Peps and lack of spare money.

Hargreaves Lansdown says the results show how fragile confidence still is, pointing out that investors are only seen as bullish when the index coefficient nears 400.

Head of research Mark Dampier says: “The market has risen but some people still have substantial losses and few are feeling gung-ho. What is most worrying is the lack of education. Some clients believe Isas are being abolished this year. The only way forward is putting personal finance on the nat-ional curriculum.”