Isa business levels are expected to soar as a result of April’s £3,000 allowance increase for all investors.
Fidelity FundsNetwork latest adviser sentiment index shows that 87 per cent of the 600 advisers surveyed say their under-50 clients would take advantage of the extra £3,000 allowance from April 6.
Seventy-six per cent say their over-50 clients have already taken advantage of the new £10,200 limit since it was opened to them last October.
The survey also reveals that 80 per cent of advisers are advising clients to invest in equities while bonds are recommended by 11 per cent.
Fidelity FundsNetwork head of UK retail sales Peter Hicks says: “It is interesting to see that there is already demand from clients to use the extra £3,000 allowance when it becomes available in the next tax year. To be able to shelter £10,200 each year from the taxman is a big deal. Over time, with accumulation, that money could be used towards paying off a mortgage or even retirement.”
Church Hill Finance principal Anthony Badaloo says the new Isa limit is a welcome gesture but any increase in business levels is also a result of other factors.
He says: “Common sense would state that if they increase the limit, business will naturally go up but the question is by what proportion and what extent is increasing the limit influencing investors’ decisions. Is it because they are increasing the limit or because the stockmarket and world economy are slightly recovering. There are a lot of factors to consider.”
Axxis Financial Planning director Owen Wintersgill says: “I have been writing more Isas but let us not forget that confidence has returned. Investors feel much more optimistic than they did and I feel that investments are loved again.
“Confidence is crucial to increasing business levels, although the more generous Isa allowance is a significant help.”