The number of people cashing in their investment ISAs is down, due to reports suggesting 'green shoots' of economic recovery.
People are hanging on to their stocks and shares ISAs as hopes of recovery in the markets increase, one specialist website claimed today.
Bestinvest suggested that people were currently waiting to see what will happen in the stock and bond markets rather than cashing in their portfolios, as analysts' hopes of economic recovery increase. This would explain recent ISA sales figures for March from the Investment Management Association (IMA), which showed a 6.68 percent rise in gross sales and a 74 percent increase in net sales.
Adrian Lowcock, senior investment advisor at Bestinvest, explained: "The gross figure is basically ISA sales and transfers and the net figure is ISA sales and transfers less redemptions. What the net figure shows, because that has risen so much compared to last year, is we are seeing an easing off of the redemptions. ISAs haven't actually been cashed in as much."
The trend noted by the IMA could also be explained by movements on the markets over March. Equities registered across-the-board gains as some reports claimed to show "green shoots" of recovery, particularly in the housing market.
This follows months of decline caused by the credit crunch - the FTSE 100, for example, is still around 40 percent below its 2007 pre-crisis highs. Mr Lowcock added: "I think the reason for [the falling redemptions] is that the markets have settled down a little bit, albeit at a lower level, and people are not rushing to cash in – they are waiting to see what will happen."
The IMA figures also showed that there were around £1.7 billion of net ISA sales over March.
