As the UK heads towards recession, Brits are showing their lack of confidence in the economy by withdrawing vast amounts of equity from stocks and shares ISAs, figures from the Investment Management Association (IMA) have revealed.

In total, savers cashed in £412million from their stocks and shares ISAs in July, up from £209.9million in June. Commenting on the shocking numbers, director of marketing at IMA, Jane Lowe said:

“With the FTSE once more under pressure in July, investors again withdrew from equity funds, with many turning to investment in absolute return funds. Total funds under management were also down during the month, by 2.6 per cent, in part owing to poor market performance.”

And it is not just the stock market and ISAs that have taken a knock amid the credit crunch; the latest Nationwide Consumer Confidence Index is out today and shows a continued lack of confidence in the UK economy as a whole.

Commenting on the results, Nationwide’s chief economist Fionnula Earley, said: “Economic uncertainty continues to affect sentiment around spending and employment, but it seems that consumers are beginning to take a realistic view of the future and are factoring in possibility of tougher times ahead.

“Lower petrol prices and more competitive new mortgage rates will be good news for the public. Team GB’s Olympic performance in Beijing may even have helped lift the nation’s spirits slightly this month.”

© Fair Investment Company Ltd