The Pep and Isa Managers Association is reassuring IFAs and fund managers
that the recent plummet in Isa sales is not a sign that the funds are
losing their appeal.
Isa sales were down by 43 per cent to £1.3bn in March from more than
£2.3bn in the same month last year and the new tax year started off
just as badly, with April and May Isa sales down by 25 and 17 per cent
respectively on the same months last year.
But in its latest newsletter, Pima blames factors such as the winter
floods and the foot and mouth outbreak for the drop in sales.
It says: “The knock-on effect of these two natural disasters, to say the
least, has devastated the economic position of a substantial part of the
investor population and savings have taken second place to survival.”
Pima also highlights the general election as injecting a degree of
uncertainty into markets, temporarily discouraging new investment.
It concludes that the Isa market is still looking positive. It says:
“Taking the many down factors into consideration, there should be no
surprise at the downturn in subscription at this time.”
Simpsons partner Andrew Merricks believes that Isas are popular but there
is still a degree of confusion surrounding them. He says: “If people have
money to invest, Isas will still be the first place they look. Any time the
markets are struggling, people are less interested.”