For immediate release: Monday 22 April 2002

 

CONSUMERS TURN TO MINI ISAs

IN TIMES OF MARKET VOLATILITY

 Results of IMA’s annual research into UK investor profile and behaviour

also reveal consumer interest from an ever-wider social background

More consumers are choosing to invest in mini ISAs than maxi ISAs for the first time since their inception in 1999, according to the latest UTIS survey unveiled today by the Investment Management Association.  50% of respondents indicated that they had or would be investing in a mini ISA in the 2001/02 tax year compared to only 38% in 2000/01 (see p4 of Report). 

The survey into the buying habits and attitudes of 500 callers to the Association’s information service examines investor profile and behaviour.  It also shows the impact that ISAs have made in less than three years, with further illustrations of the rise in mini ISA popularity.   The number of people intending to invest the maximum allowed into the mini component is at its highest level (44%) and the average contribution into a mini investment fund ISA has increased to £1,965.

Furthermore, investments funds are appealing to a wider investment audience.  The number of existing fund investors in the DE socio-economic group who called UTIS increased to 17% in this latest survey (9% in 2000).  In addition, the number of UTIS callers from this group overall increased to 15% in 2001, from 10% in the previous year.

Clare Arber, Head of Communications at the IMA, commented:

“The prevailing economic conditions have affected investors in many ways this year, not least the preference for mini ISA investment.  The research also reveals that this trend has been accompanied by a move towards greater fund diversification.  Savings are being distributed across a greater number of funds, spread across a wider range of management companies.”

The research found that:

• Two thirds of respondents hold investment funds through an ISA.

• Investment funds are considered more attractive than other forms of investment due to their ability to outperform building society savings accounts.

• The average age of callers to UTIS is 53.9 years.

• Callers continue to come from an ever wider social background – 2001 saw 17% of existing fund holders call from the DE socio-economic group, compared to 9% the previous year.

• The main reason for people finding out about investment funds is to make their money grow.

• Callers to the Unit Trust Information Service are split 67% men and 33% women, compared to 77% and 23% respectively in 1994, when the first survey was carried out.

• Investors plan to keen their unit trust/OEIC investment for an average of 8.1 years.

 Investments

• The number of people holding ISAs (62%) almost meets the number of PEP holders (63%) for the first time since their introduction in 1999.

• 79% of investors are opting for a lump sum investment, with 29% saving regularly.

• Average contribution for a lump sum investment is £4,610 and £98.30 for regular savings.

• More people are investing in a Mini ISA (50%) rather than a Maxi ISA (45%) for the first time since the beginning of the survey.

• Average investment in a Maxi investment fund ISA is £5,130 and £1,965 for a Mini investment fund ISA.

• On average, investors own 6 funds from five fund management companies.  In 2000, the mean holding was 5.1 funds across 4.5 companies, (6.3 and 5.1 respectively in 2001).

• Performance is reviewed monthly. 

Information/Distribution

• Buying direct from the fund management company proved the most popular distribution channel, with 44% of respondents going direct, overtaking discount brokers.

• Post remains the favourite method for buying funds, apart from ISAs where the ‘face to face’ route is preferred.

• Over half of those callers who took advice when buying investment funds would prefer to pay a fee.  However, the average fee they would consider paying is £41 per hour.

• Press articles remain the most influential source of information that helped callers in their decision to buy unit trusts/OEICs.

• Past performance and press reviews are the main reasons for callers deciding which fund management company to contact. 

• 26% of callers would choose to use an IFA to buy an investment fund.  However, 35% would use an IFA as a source of information in their investment decision-making

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For further information please contact:

Clare Arber, Head of Communications, IMA, 020 7831 0898

Helen Stephenson, PR Assistant, IMA, 020 7831 0898

Susie Smith, Communications Co-ordinator, IMA, 020 7831 0898

Notes to Editors

If a copy of the survey is not attached, it can be found on the IMA website, attached to a copy of this press release.

This is the eighth successive year that the survey has been commissioned by the Association.  It was carried out by Continental Research. 500 callers to the IMA’s Unit Trust Information Service (UTIS) were selected at random and interviewed by telephone in November 2001.

UTIS is the Association’s dedicated, 24-hour information line, handling all the public information booklets produced by the IMA. Readers should call +44 (0)20 8207 1361 for the range of free, generic guides. Alternatively, full details are available from the IMA website at The Investment Management Association publishes a number of useful factsheets to help savers understand unit trust and OEIC investment.  These are available free from the Unit Trust Information Service by calling 020 8207 1361, but can also be accessed on the IMA website.

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