Savers in last-minute rush for Isas

SALES of investment products picked up in March as investors raced to use up their tax-free savings allowance before the end of the tax year, latest figures show.

Total sales of individual savings accounts (Isas) hit £992m last month - 87% higher than in February. In the last five days of the tax year ended 5 April, investors spent £420m on Isas.

But the overall figure for March was still nearly a quarter lower than sales in the same month last year. Investors have been frightened away by falling stock markets. Overall Isa sales for the 200 1/2002 tax year were £6.9bn, down 30%, the Investment Management Association said.

'Times of stock market uncertainty are very difficult for investors, no matter how experienced they are,' said Clare Arber, IMA's communications head. 'Human nature is very irrational when it comes to dealing with money. People far prefer to invest when markets are positive and share prices are high, but some do recognise the opportunities for investing in times of low market value.'

Around £215m of Isa sales were made through fund supermarkets in March, 22% of the total. That compares with £80m in February. One third of investors bought direct, while 42% bought through independent financial advisers, and 25% through a tied agent or direct sales force.

IMA was formed earlier this year by the merger of the Association of Unit Trusts and Investment Trusts and the Fund Managers Association. It represents 99% of investment funds under management through unit trusts and open-ended investment companies (Oiecs).