Contributions to newly opened stocks and shares ISAs increased by 13% year-on-year in the third quarter, Scottish Friendly has revealed.

The savings and investment firm’s latest data showed that the rise in contributions was recorded despite the ongoing squeeze on household finances.

In Q3, the sharpest jump in contributions came from 18 to 34 year olds, increasing by 21% year-on-year. For those aged between 35 to 49 years old and 50 to 64 years old, contributions increased by 7% and 12% respectively.

New ISA investors in Scotland increased their opening contributions the most (21%), followed by those in the West Midlands (18%), the South West (15%), the North East (13%), Wales (12%), the South East (11%), the North West and Greater London (both 7%), and the East Midlands (4%).

Furthermore, parents who opened junior ISAs in Q3 increased their contributions by 4%. The savings firm said that the smaller contribution highlights the financial pressure that those with children are facing at the moment.

Savings specialist at Scottish Friendly, Kevin Brown, stated that the increase in contributions suggests that many investors are "taking a longer-term view and recognising the potential benefits of staying invested through market cycles".

He added: "Rather than pulling back in the face of uncertainty, many individuals appear to be using their ISA allowances to make their money work harder for them. This is a positive sign that households are looking beyond short-term challenges to build resilience and growth over time.

"There is continued speculation that the Chancellor may cut the annual cash ISA allowance in the forthcoming Autumn Statement later this month. If that does happen it could nudge more people to consider investing. Whilst everyone’s personal circumstances always need to be considered, investing has proven to provide the greatest potential of building wealth and outpacing inflation over the long-term."

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