Two thirds plan to use their 2013/14 Isa allowance

Isa coins

With just two days left of the current tax year, almost two thirds (71%) of Moneywise readers claim they will be using their 2013/14 Isa allowance, according to a poll.

Of them, nearly a half (47%) will use the full allowance of £11,520, and a quarter (24%) will use some of it.

Of the remaining third (29%) of readers who don't plan to save in an Isa in the soon-to-end 2013/14 tax year, most simply can't afford to.

Some 24% of readers said they didn't have enough spare cash lying around to pay into an Isa.

And 6% of readers admitted they wouldn't be saving into an Isa simply because they didn't understand how to use their allowance.

Meanwhile, analysis from fund management company Fidelity has revealed why some of its clients choose to invest in stocks and shares Isas.

It found 73% of savers with current equity Isas said they use them because they offer a better rate of return compared to cash. Two fifths (40%) said they wanted to take advantage of the current higher tax allowances available with stocks and shares Isas than with cash Isas.

The analysis has also revealed popular types of investment for this year's and next's stocks and shares Isa savers. For example, 68% said they'd be more likely to choose actively-managed funds this year compared to passive investments such as tracker funds.

Over the next year, Fidelity found 35% of stocks and shares Isa savers are likely to invest in equities, while 12% are keen to invest in fixed income. And 17% of savers are attracted to equity income funds.
And just under half said they'd be investing in the UK over the next year.

Find the best Investment Isa

Investor confidence

Tom Stevenson, investment director for Fidelity Personal Investing, said: "Savers are certainly looking more towards equities this year than bonds. As the global economic picture continues to improve, investors are feeling more confident – which often leads them back towards the stockmarket, and away from traditional 'safe haven' investments like bonds.

"There's also a real appetite for savers for equity income. Income remains in short supply in an environment of generally low interest rates across the world. It's encouraging to see that so many savers are aware of the benefits of reinvesting dividend income, as it is a major contributor to total returns over time."

This Sunday - 6 April - will be the first day of the new 2014/15 tax year when the cash Isa and stocks and shares Isa annual allowances will rise to £5,940 and £11,880. However, these limits will only last until 1 July because of the introduction of new Isas, or Nisas.

For the rest of the tax year, the total annual Nisa allowance will rise to £15,000 and savers can choose to hold whichever combination of cash and stocks and shares as they see fit.

More about