Consumers saving less

Net sales of Individual Savings Accounts (ISAs) are down 72 per cent, according to the Investment Management Association (IMA).

12:16 06 September 2004

Net sales of Individual Savings Accounts (ISAs) are down 72 per cent, according to the Investment Management Association (IMA).

July saw just 77 million of net ISA sales, compared with over 279 million in the same month last year - a drop of 72 per cent.

Compared with the figures for June of this year, July's were also down by 36 per cent.

The IMA said that one explanation of these sizeable outflows may be a falloff of investor confidence during a "stagnant market, coupled with increasing interest rates making cash an appealing alternative."

Overall net investment sales also fell significantly: Total net sales were 172 million in July 2004 compared with 1.4 billion in July 2003. Investment dropped in both the retail and institutional arenas.

The most popular sectors for private investors were UK equity income and cautious managed while the least popular were the far east excluding Japan and Europe excluding UK.

However, institutional investors were more upbeat about the prospects for continental Europe. The Europe excluding UK sector was the most popular for professional investors in terms of net sales. UK all companies followed in second place.

For these investors the least favourite sectors were UK smaller companies and UK gilt.