Over 50s Will Invest Over GBP2.8 Billion in Stocks and Shares ISAs Before 5 April According to Research From Legal & General

TADWORTH, England - Based on a targeted ISA research study(1) Legal & General, the UK’s second largest stocks and shares ISA provider (see note to editors 3), estimates around one million investors age 50 and over will top up under the new ISA rules. Based on these figures we estimate the realistic value of the top up stocks and shares ISA market created by the increase in allowances for the over 50(2) age group, is GBP2.85 billion in the 2009/2010 tax year.

The research takes account only of stocks and shares ISA and unit trust investors aged 50 or over.

It shows that over one in five (21 per cent) in this age group have taken out a stocks and shares ISA or unit trust and 23 per cent of this group say they are going to use their additional ISA allowance before 5 April 2010(3).

Claire Evans, Legal & General Unit Trusts Marketing Director said: “The benefit of our targeted research is that this is the first time this opportunity has been quantified. Legal & General has shown how much additional investment we can realistically expect the over 50s age group to make. We estimate almost a million investors are planning to top up in the current tax year providing a clear opportunity for advisers to contact clients who fit this profile now.”

A second group (21 per cent) in this sample (i.e. those age 50 and over who have taken out a stocks and shares ISA or unit trust) claim they will top up but are unsure when - possibly waiting to see whether the economy is showing signs of recovery first.

Claire added: “Our research also shows that a fifth of the over 50s in this target group say they do plan to use their ISA limit but they do not know when. So there are many more over 50s out there, we would estimate around 870,000 investors, who might also invest up to the new limit given the right market conditions.

In our experience these investors tend to use their ISA allowance in Q1, just before tax year end. We believe many are holding back, possibly waiting to see whether investment markets show further signs of recovery. We call them the last minute investors and this group could contribute around GBP2.6 billion of investment, taking the total potential stocks and shares ISA top up value for 50s and over sector to GBP5.45 billion. Only one in four in our sample (24 per cent) said they would not top up.”

Note (1) - In a survey completed in July this year, Legal & General questioned over 400 ISA and unit trust investors, all aged over 50 at the time of the survey, about the changes to the amount they could invest in a stocks and shares ISA.

Note (2) - The GBP3,000 extra stocks and shares ISA allowance applies to investors who will be over 50 years of age by 5 April 2010 to qualify under the new rules which come into force on 6 October 2009.

Note (3) - The research panel, which comprises a 50,000 national equivalent sample base, generated the data on the proportion of over 50’s holding a stocks and shares ISA or unit trust (21 per cent). The online survey provided the data on when investors will top up.

Notes to Editors:

1) The value of the top up investments likely to result form the change in allowances from 6 October 2009 to the end of the tax year on 5 April 2010 is calculated as follows:

- Over 50s population = 32 per cent = 19.673 million people = (source ONS data 2008) - Over 50s holding a stocks and shares ISA or a unit trust or both = 21 per cent of research panel sample = 4,131,300 people - Number of investors in the survey who say they will top up using their new over 50s ISA allowance before the end of the tax year = 23 per cent = 950,199 people - Value of top ups at GBP3,000 per investor = GBP2,850,597 million (GBP2.85 billion). - Potential value of “not sure when” investors we estimate at 867,573 people (who make up 21 per cent of the sample) at GBP3,000 per investor = GBP2,602,719 million (GBP2.6 billion). - Combined value = GBP5.45 billion

2) Survey - methodology:

Research for the Legal & General ISA Survey was run by Aevolve based on a sample provided by Aurora Market Research from their nationally representative consumer panel (the Justtheanswer panel which currently has 50,000 members) - in July 2009. Online interviews were conducted among 406 adults (age 50+) all of whom had invested in a stocks and shares ISA or Unit Trust. None of the respondents hold solely a Cash ISA. Of the total sample 51 percent of respondents were working and 33 per cent invest each year. The panel contains 22% of respondents over the age of 50 = 12,061 members.

3) Legal & General Unit Trust Management (UTM) are the 2nd largest ISA fund manager, with over GBP5.7 billion in ISA funds under management, and the 3rd largest Unit Trust company, with GBP21.7 billion in retail and institutional unit trusts in the UK (as at 31 July 2009 - source IMA). Visit www.legalandgeneral.com/investments/isas/ for details of Legal & General’s ISA products.

The Legal & General range of ISAs is provided by Legal & General (Portfolio Management Services) Limited

Registered in England 2457525. Registered address: One Coleman Street, London, EC2R 5AA.

Source: Legal & General

Contact: Mike Connolly, PR Manager - Wealth, +44(0)1737-375365