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1st Jaunary 2014

Combiniation of economic forices leads to bumper ISA season prediction

Growth in popularity, flexibility and improving conditions favour key investment period

Stuart Welch, CEO of TD Direct Investing is predicting a bumper stocks and shares ISA season for 2014 on the back of low interest rates, improving investor confidence and recent regulatory changes.

Over the past three years the total number of new ISA accounts opened at TD in the midst of the ISA season (January-April each year) has seen a steady upward trend. There has been an average of 80% increase between January-April, in the three years 2011-2013, with a 93% increase over the same period last year.

“We are already seeing signs that the economy is improving, with the FTSE ending the year at 6749, unemployment down and house prices increasing.  The knock on effect of this is that people start to feel more confident about investing.  With the FTSE growing by 14% over the course of 2013, investing in stocks and shares could be something consumers look to more in 2014.”

The average value of ISA portfolios is also trending upwards, indicating that the ISA market is ripe for further growth in 2014. TD clients’ ISA portfolios have increased by an average of 14% between 2011 and 2013.

It seems the Government is also recognising the popularity, flexibility and impact of ISAs; with the decision last year to make AIM shares eligible for inclusion in stocks and shares ISAs; and to make them free of stamp duty in 2014.  More recently, the autumn budget brought welcome news that the limit was going up to £11,760.

Stuart Welch continues: “These changes have brought increased choice to investors, opening up new opportunities and ultimately increasing accessibility.  Despite the economic environment, we have seen an increase in people investing in AIM stocks from their ISAs – showing that people are not scared to venture beyond the FTSE.”

“The increasing trend in popularity of ISAs, coupled with signs of economic improvement and interest rates remaining low, point to an increase in interest during this important period in the investment calendar. TD will be capitalising on this with a selection of seminars for those wishing to learn more about DIY investing and enhanced offers.”

Whilst the deadline for the end of the tax year is not until April 6th, with the increase in marketing drives and offers from providers, the season does start earlier.  A third (33%) of TD’s clients from 2012 and 2013 opened ISAs in January and February as opposed to March /April, indicating that people are open to the offers and educational support available.