New ISA sales and the value of new ISA policies dip in Q1 2023 as savers struggle to set aside money for the long-term.
In Q1 2023 sales of new ISA policies were -7% on Q4 2022
The value of new ISA policies also dipped -6% on the previous quarter and is down -29% since Q1 2019
However, long-term commitment to saving and investing for children remains for those in a position to do so with the value of new JISA policies up +24% in Q1 2023
New data from financial mutual Scottish Friendly reveals the number of newly opened stocks and shares ISA policies dipped -7% in Q1 2023 compared with Q4 2022. Meanwhile, the value of those new policies also dipped -6% over the same period.
That picture was uniform across age groups and regions in the UK. Quarter-on-quarter new policy sales for those aged 18-34 years dipped -4% when comparing Q1 2023 to Q4 2022. The same was true for those aged 35-49 years (-8%) and 50-64 years (-8%). New policy values also fell by -1%, -5% and -8% respectively.
Across the UK new ISA sales dropped most significantly Q4 2022 to Q1 2023 in Wales (-14%) and the South-West (-11%) with all other regions falling between -4% and -8% (see table below).
Equally, the value of new policies went into negative territory in all regions in the last quarter aside from the South-West (+9%) and Northern Ireland (+1%). The most significant drops in value of new policies were seen in Wales (-17%), East Midlands (-16%) and the South-East (-15%).
The opening of new Junior ISA policies also reduced significantly Q4 2022 to Q1 2023 down -35% over the period but, was +108% up since Scottish Friendly began recording data in Q1 2019.
More encouragingly though, the value of new JISA policies was up +24% over the last quarter, perhaps pointing to an end of tax year rush into children’s long-term savings vehicles for those in a position to do so.
Kevin Brown, savings specialist at Scottish Friendly, comments:
"The data from Q1 2023 seems to confirm what we suspected would happen in Q4 2022 across the industry. Financial pressures are mounting on households across the country and that is making it harder to put money aside for the long-term in stocks and shares ISAs or Junior ISAs"
Brown continues:
"Our data suggests that while the heavens haven’t opened there are some spots of rain we are all feeling. As a result, the money people would be setting aside for those rainy days is being put to work meeting rising financial demands. It’s unsurprising that purse strings are stretched when you consider households have had to readjust to several consecutive base interest rate rises since December 2021 and CPI inflation remains stubbornly sticky at 8.7% as food and energy prices remain high."
Brown concludes:
"However, while the pace of new ISA and Junior ISA policies opened and their values have slowed, the long-term commitment to saving and investing remains. What is particularly pleasing is that saving and investing for children remains a high priority despite the obvious headwinds. In addition, although adults saving into stocks and shares ISAs for themselves remains a challenge for many, we do know that individuals still have a commitment to do so when they can."
Contacts:
Heather McRoberts, PR & Communications, Scottish Friendly
07783151560
Editors notes:
Remember that the value of investments can go down as well as up and you could get back less than you paid in. Past performance is no guide to future results. Tax treatment depends on individual circumstances which can change in the future.
About Scottish Friendly
Scottish Friendly is a leading UK mutual life and investments organisation. It provides investors and their families with a wide range of investment and protection solutions and provides life and investment products and services to other financial organisations.
Scottish Friendly has roots stretching back to 1862. Established as the City of Glasgow Friendly Society, its name changed in October 1992 when it took over Scottish Friendly Assurance.
In recent years Scottish Friendly has significantly restructured its business. The Group has flourished through a three-part growth strategy of organic growth, mergers and acquisitions, and business process outsourcing.
Scottish Friendly, Galbraith House, 16 Blythswood Square, Glasgow, G2 4HJ
Scottish Friendly Assurance Society Limited. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Scottish Friendly Asset Managers Limited. Authorised and regulated by the Financial Conduct Authority.