Research by asset management Schroeders has revealed that one million people are planning to invest in stocks and shares Isas before the April 5 deadline.
The move is indicative of the generally poor rates offered by cash deposit Isas.
Robin Stoakley of Schroders said: ‘The appetite for stocks and shares Isas is understandable given the paltry returns currently available on cash deposits and the fact that rates for conventional annuities are falling. Increasingly investors are turning to Isas as a means to provide additional income to supplement rising living costs, as well as to provide long-term capital growth.’
Isas are the most popular investment product in Britain. They are a wrapper in which cash, shares and stock market funds can be held in order to avoid capital gains tax and reduce income tax. You can invest up to £10,200 in an Isa, with a maximum of £5,100 in cash.