ISA boost for investment funds

There was a surge in the amount of money paid into Isas at the beginning of April as investors looked to use up their tax-free savings allowance before the start of the new tax year.

Investors paid £349 million into Isa versions of funds between April 1 and 5, which was more than double the £152 million paid in during the same period in 2010, according to the Investment Management Association.

The surge in investment saw the amount of money being paid into UK-based unit trusts and OEICs approach £1 billion between March 1 and April 5. The £956 million is the highest level of investment for the period since 2002.

However, total Isa sales for the whole of 2010/2011 of £3.68 billion failed to reach the heights of the previous year's figures of £3.99 billion.

The performance of the past two years marks a significant turnaround for the sector, which saw more money taken out of Isas than was paid into them for four consecutive years between 2004/05 and 2008/09.

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