Information: For immediate release Tuesday 30th March 1999

INVESTOR RELUCTANCE TO COMMIT TO INDIVIDUAL SAVINGS ACCOUNTS (ISAs)

Monthly research undertaken by the Association of Unit Trusts and Investment Funds (AUTIF) over the past six months shows that consumers are demonstrating a distinct unwillingness to commit to ISAs – at least for the time being.

The latest figures show that 59% of the total sample stated that they were simply not interested in ISAs – this compares with 53% last September. Although there was a temporary improvement in the level of interest in December, this was short-lived. Amongst PEP investors, although the interest level is considerably higher, 13% were "not interested" and a somewhat alarming 28% "really did not know" whether they wanted to buy ISAs. (TESSA investors also demonstrated a similar lack of enthusiasm.)

Anne McMeehan, Director of Communications at AUTIF, commented:

"Whilst it’s fair to say that most investment management companies have been concentrating their marketing efforts on the end-of-season PEP push, it is nevertheless worrying that so close to their arrival, ISAs have still not succeeded in attracting wider public support."

She continued:

"It seems that the investment industry is already experiencing an uphill struggle in converting its existing customers to the new ISA. The Government’s stated objective of appealing to novice investors is going to be an even tougher call."

Many companies have chosen to delay the promotion of their ISA product range and it is likely that public understanding will improve once these campaigns get underway. Much of the popularity of the PEP came about some years after their original inception, however, it is likely that this Government will want to see ISAs succeed much more quickly.

For further information please contact:

Anne McMeehan, Director of Communications, AUTIF, 0171 831 0898
Clare Arber, PR Manager, AUTIF, 0171 831 0898
Susie Poote, Communications Assistant, AUTIF, 0171 831 0898

Notes for Editors:

1. Research is undertaken each month amongst a sample of 1,000 by MarketMinder® - contact Mike Hare – Chetwood, tel 01778 345588.

2. The question asked was "When ISAs take over from PEPs and TESSAs this April, which one of the following statements reflects your current intentions? (This question has been asked each month since September 1998.)

• I will take out an ISA for the same amount that I currently save in PEPs and TESSAs.
• I will take out an ISA and save more than I currently do.
• I will take out an ISA but save less than I currently do.
• I intend to wait and see what is on offer when ISAs start for real.
• I really don’t know yet.
• I’m not interested.

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