Investment in stocks and shares ISAs rebounded in Scotland during the second quarter of 2020, after a sharp drop in the number opened during the first three months of the year.
The inaugural New Investor Index from Scottish Friendly revealed that the volume of new investment into stocks and shares ISA subscriptions in the country rose by 31% in the three months to June, after falling by 28% in the first quarter.
The index tracks sales of adult investment ISAs and the total value of new policies among Scottish Friendly’s UK-wide customer base, with quarterly activity measured against a base rate of 100.
It showed a surge of activity across the UK during the second quarter, with the total number of people investing into a stocks and shares ISA increasing by 40% on the first quarter.
The total value of new investment in the UK increased by 71% in the three months to June, while in Scotland new investments rose in value by 64%.
The outbreak of Covid-19 and the start of lockdown in March coincided with a 22% drop in UK sales of investment ISAs between the fourth quarter of 2019 and the first quarter of 2020. There was also a 31% reduction in the value of investments among all new and existing customers between the two quarters.
Office for National Statistics data showed that the UK household savings ratio reached an all-time high of 29.1% in the second quarter of this year, up from 9.6% in the first three months of the year.
In Scotland, the value of new investments in the second quarter was up by nearly a third on the same period in 2019, which was higher than the UK average of 23%.
Kevin Brown, communications manager at Scottish Friendly, said: “The initial shock of a major pandemic seemed to discourage investment in stocks and shares, but this has quickly given way to much higher levels of engagement as investors came flooding back in the second quarter.
“In Scotland, the number of new investments has increased significantly in the second quarter however numbers remain slightly below where they were before the pandemic struck,” he continued, adding that year-on-year, savers in Scotland are investing much more of their cash into stocks and shares ISAs.
“Although furlough led to many workers experiencing a drop in income and also to heavy redundancies, generally spending opportunities have been limited by the effects of lockdown restrictions – this has led to an increase in many Brits’ capacity to save, as official data shows, which has led to the rush of new investors to stocks and shares ISAs in Scotland.”