29 June 1999
DOUBLE THE SAVINGS IN ISAs
Over £4 billion of ISAs were taken out in the first two months after their introduction, twice the amount saved in PEPs and TESSAs in the same period last year, Economic Secretary Patricia Hewitt announced today.
Ms Hewitt said:
"This is good news. Savers have responded positively to the new opportunities for tax free savings which ISAs offer and invested £4.2 billion in the first two months, with the majority of sales in the cash ISAs which are particularly attractive to the new or low level savers we wish to encourage to develop the savings habit.
"And the 670,000 new unit trust stocks and shares ISAs opened in April is more than double the number of PEPs opened in the whole of their first year.
"This shows that those providers who have developed and marketed attractive products are finding a welcome for them. It is a striking achievement that this follows the heavy marketing of PEPs and TESSAs at the end of the last financial year - almost 60 per cent higher than in the same period in 1998.
"The ISA format was developed following detailed consultation with the savings industry, to meet their request for a flexible design which would accommodate the needs of the maximum number of savers. This was welcomed by the industry. The introduction of CAT standards has done a great deal to help savers recognise products which are straightforward, clear and fair without the need for additional financial advice."Sales of cash ISAs - with £100 million going to National Savings alone - show how right the Government was to lift the five-year lock-in that made TESSAs unattractive to many people."
NOTES TO EDITORS
1. Available figures for the first two months of ISAs show :
£4.161 billion paid into ISAs in April and May was double the comparable figure of £2.013 billion for PEPs and TESSAs in April and May 1998:
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£3.095 billion in cash ISAs, including £2.115 billion with banks and £980 million with building societies (source: Bank of England);
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£1.066 billion was saved in unit trust and open ended investment companies (oiecs) (source: AUTIF).
670,000 new unit trust stocks and shares ISAs opened in April is more than double the 270,000 PEPs opened in 1987, their first year.
395 ISA managers approved by the Inland Revenue for one or more components by 23 June:
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284 to offer the stocks and shares component;
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239 to offer the cash component;