Investors flocking back into the market

Confidence is growing among investors, with nearly half planning to increase their stock market holdings during the coming months, research has suggested.

Some 45 per cent of active investors said they expected to increase their exposure to stocks and shares, up from 40 per cent this time last year, while only 7 per cent plan to reduce it, according to the Association of Investment Companies (AIC).

A record 76 per cent of investors also plan to use their tax-free ISA allowance this year, 34 per cent of whom said they would put all of their money into an equity ISA, up from just 27 per cent 12 months ago. But a fifth of people are concerned about the impact inflation will have on their savings, with this overtaking fears of a double-dip recession and worries about the impact of the hike to VAT, which were the top concerns in the autumn.

A further 16 per cent of investors are worried about a stock market crash, while 15 per cent are still concerned that the UK could be heading back into recession.

Annabel Brodie-Smith, communications director at the AIC, said: "An increased appetite for risk is also clear with active investors favouring emerging markets over the UK."