By Lea Pachta

Fund supermarket and online stockbroker Interactive Investor has revealed that private investors invested two and a half times the amount in their self select ISA in the first two days of the new tax year compared to the same days last year.

After record levels of investment in the last tax year investors have been quick to take advantage of the new £10,200 annual ISA allowance.

Rebecca O’Keeffe, head of investment at Interactive Investor, said:

“Following a busy weekend we have seen a substantial inflow of cash into our self-select ISA since the start of the new tax year. Investors now have the chance to save up to £10,200 tax free either in a lump sum or through regular payments of £850 per month. Not everyone will have cash available but if you are going to invest this year an ISA is the place to start. With no ISA administration fee if you invest through us, it really is a low cost option.

“More investors than ever are looking to the flexibility that a self-select ISA offers, combined with the potential for better returns compared to those currently on offer via cash ISAs. For higher rate tax payers, especially those who face paying the new 50% tax rate, using all available tax advantages makes perfect sense.”

A recent survey of over 1000 private investors also revealed that over half (55%) have a positive view on the investment outlook over the next five years. One in four (27%) have a neutral view on the investment outlook while under one in ten (8%) have a negative view on the markets over the next five years.

Rebecca added:

“The generally positive outlook so far this year has meant investors are looking for growth opportunities over the long term. You should not invest unless you have a minimum five year investment horizon, which will hopefully allow you to ride out any possible short term market dips.

“As a result of increased investor confidence our most popular funds over the last month have been those that invest in emerging markets, including Latin America, India, China and South East Asia. Despite record growth in these markets over the last 12 months investors clearly see them as good long term bets.”

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