Barclays sees upturn for stocks and shares Isas

Almost half of Barclays Stockbrokers' Investment Isa customers have filled their full allowances so far this financial year, the firm has said.

Data from the tax-free savings accounts provider also found that clients were largely bullish on equities.

Just over one in four 27 per cent are increasing their exposure to the asset class - while 63 per cent expect equities to return the most over 2009, compared to bonds or cash.

Indeed, falling AERs for cash savings accounts, including cash Isas, were found to be a major factor behind the increasingly positive sentiment among customers towards equities.

Since late last year, the Bank of England has slashed its lending rate from five per cent to just 0.5 per cent in a bid to make loans cheaper and thereby stimulate the economy.

These moves have been mirrored by savings account providers - with the average instant-access cash account now returning less than one per cent.

Stocks and shares Isas are maintaining their popularity despite the difficult market conditions, one provider has said.

Barbara-Ann King, head of investment strategy at Barclays Stockbrokers, said: "Cash is no longer king. Whilst interest rates continue to be low, informed investors are taking advantage of the potential long term returns from investments.

"We are delighted to see investors actively taking advantage of their tax free allowance despite market volatility, and it's encouraging to see their outlook remains positive for the next tax year."

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2009-03-10 12:51:59 © Moneyextra.com