More than two thirds of equity investors are planning full advantage of their increased stocks and shares ISA allowance in the new tax year, according to Barclays Stockbrokers.

With the increased ISA limit – allowing up to £10,200 instead of £7,200 to be invested in stocks and shares – just days away, the online stockbroker has revealed that 71 per cent of investors plan to use their full allowance, while four out of five investors will use part of their allowance in the new tax year.

Of those who have made plans to invest in equities in the 2010/11 tax year, 34 per cent have said they intend to invest in investment funds while a further one in five have an appetite for Exchange Traded Funds (ETFs).

Almost two thirds of investors plan to increase their ISA investments because they want to protect more of their assets from tax, while the driving force for 29 per cent of investors is to get better returns than those currently available on cash.

Commenting, Barbara-Ann King, head of investments at Barclays Stockbrokers, says it is “encouraging” to see investors planning ahead for the next tax year, before advising investors to create a diversified investment portfolio.

“In this low interest rate environment, investors also need to develop diversified portfolios to stand the best chance of obtaining the returns they seek. Our clients are responding effectively to the challenges of rapidly changing markets by branching out from the traditional shares, gilts and bonds, and utilising investment instruments such as Exchange Traded Funds.

“A fifth of our ISA investors plan to invest in ETFs within their ISA in the next tax year, as they provide instant diversification and low cost access to markets and indices, including many emerging markets,” she said.

© Fair Investment Company Ltd