Savers opted to take advantage of their tax free ISA allowance between March and April by opening an account.
An increase in the annual ISA allowance has boosted the UK investment industry.
Consumers paid almost £350 million into ISAs around the turn of the tax year marking one of the strongest seasons for investment funds over the last nine years.
Figures revealed by the Investment Management Association (IMA) show that between between March 1 and April 5 about £956 million was paid into UK-based unit trusts and open-ended investment companies (Oeics). This is the largest recorded figure since 2002.
The upsurge occurred as consumers rushed to make the most of their annual ISA allowance before the start of the new tax year – £349 million was paid into accounts between April 1 and 5, which is more than double the amount recorded during the same period in the previous year.
Jane Lowe, director of markets at the IMA said: “The last two tax years have together seen a big jump in ISA inflows to more than £7.5 billion. This coincides with two increases to the annual allowance in October 2009 and April 2010 and compares starkly to ISA outflows of over £5 billion over the preceding five years”.
Alan Easter, a director of broker Willis Owen, said: “These figures show that ISAs are clearly still valued by investors. Despite the squeeze on finances, more and more people are attracted by the tax-free wrapper that investment Isas offer, and the potential for growth, rather then leaving their savings sitting idly in a low interest bank account”.
However, total ISA sales for the whole of the previous tax year were still slightly lower than the 2009/2010 figures.