Thursday 19th April 2007
Consumers are advised to seek financial advice before taking out a new individual savings account (Isa), according to an expert.
The suggestions follow research showing record numbers of Britons now consult independent financial advisers (IFAs) on such decisions, as reported by industry body IFA Promotion (IFAP).
Figures published by the firm show an eight per cent increase year-on-year in the number of people seeking advice on Isas in the first quarter.
David Elms, chief executive of IFAP, ascribed the rush to "New Years resolutions and a desire to take control of their finances as the end of the tax year approaches".
He added that consumers should ensure they know the facts before making any decisions regarding their methods of saving.
"From an industry perspective its most reassuring to know that even more consumers are ensuring they get the best possible advice," he claimed.
The data shows that Isas and unit trusts now form 11 per cent of all requests for advice received by IFAs, more than equity release, personal protection and stakeholder pensions.
High street bank Abbey recently suggested that Britons looking to open new Isas could be well advised to check whether providers allow balance transfers to be made from existing accounts.
Reza Attar-Zadeh, head of savings and investments at Abbey, said: "Many headline Isas do not allow transfers in.
"In most cases, the majority of cash Isa investors - who invest year after year -would be better off opting for an account that allows them to transfer their existing cash Isa money."
The bank also recommended that those wishing to switch their Isas or open new accounts should do so early to make the best use of the tax-free savings offered throughout the duration of the final year.
According to Abbey, UK savers could miss out on a total of nearly £3 billion by waiting until 2008 to take advantage of the tax benefits of Isas.
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