Assetz customers snubbing cash ISAs to boost their IFISA investment

The peer-to-peer business lender’s first-quarter investor barometer found 48 per cent were allocating most of their IFISA funds to the platform’s tax wrapper.

Just eight per cent confirmed they would be investing in cash ISAs, with a quarter planning to opt for stocks and shares ISAs.

The poll of Assetz Capital’s 33,000 investors also revealed that 53 per cent identify high interest rates as the main benefit of an IFISA, with the stability of rates over time and the security of funds listed as the deciding factor for 17 per cent and 18 per cent of users respectively.

“When surveyed in August last year, IFISAs made up 37 per cent of the average Assetz Capital investor’s ISA portfolio, with stocks and shares slightly ahead at 44 per cent,” Stuart Law (pictured), chief executive at Assetz Capital, said.

“Just six months later, the results suggest that a significant portion of our investors are planning to jump ship to the IFISA.

“It’s little surprise that our experienced investors who understand the risks are increasingly opting for the attractive headline rates of return offered by IFISAs.

“However, with many traditional ISAs causing some investors to lose money on their investments in real terms by failing to beat the inflation rate, we expect this trend to increase among the wider public as more and more people become aware of the benefits of the ‘third way’ offered by the IFISA.”

Law predicted it was “a matter of time” before the low returns of cash ISAs mean they are no longer part of an investors’ portfolio.

- March 22, 2019