May 25 2006
Consumers planning to set aside something for a rainy day are advised to take advantage of tax-free share Isas (individual savings accounts), as the current stock market climate is proving favourable for investment, according to the Peps & Isas Managers Association (PIMA).
A fall in share prices on the FTSE 100 means that managers of stock market-lined savings will be buying shares for less.
Up to £4,000 a year can be invested in a mini share Isa or up to £7,000 in a stocks and shares maxi Isa - share Isas are good for long term savings and for consumers willing to take some risk.
Investors need to go through a stock broker or manager to invest in a share Isa and fund managers such as Legal & General, Jupiter, and New Star provide a collection of bonds or equities for savers to choose from.
Fund managers charge a fee for providing the Isa - some charge for purchasing investments, some for collecting investments and some charge for selling them.
"There has been a tremendous increase in share Isas, both direct investments through equities and also through funds in the last six months, more than there has been in the last three years," said Tony Vine-Lott director-general PIMA.
"If the stock market goes up for two days, you find people start buying shares. If it goes down for two days, they start selling them! People are very sensitive to what's happening on the stock market"
"Over the last twelve months shares have seen a significant rise, around 20 per cent. For the last six months, people have been investing."
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